CCW Packet

CITY OF DOVER, DELAWARE COUNCIL COMMITTEE OF THE WHOLE MEETING Tuesday, January 10, 2023 at 6:00 PM City Hall Council Chambers, 15 Loockerman Plaza, Dover, Delaware AGENDA Public comments are welcomed on any item and will be permitted at the appropriate time. When possible, please notify the City Clerk (302-736-7008 or email at cityclerk@dover.de.us) should you wish to be recognized. VIRTUAL MEETING NOTICE This meeting will be held in City Hall Council Chambers with electronic access via WebEx. Public participation information is as follows: Dial: 1-650-479-3208 Link: https://rb.gy/akns15 Event number: 2530 856 3210 Event password: DOVER (if needed) If you are new to WebEx, get the app now at https://www.webex.com/ to be ready when the meeting starts. CALL COUNCIL COMMITTEE OF THE WHOLE MEETING TO ORDER UTILITY COMMITTEE ADOPTION OF THE AGENDA 1. Evaluation of Bids – FY 2023 Street and Alley Program (Jason Lyon, Director of Water and Wastewater) (Staff recommendation: to award the contract to Sam’s Construction, LLC, for the City of Dover FY 2023 Street and Alley Program, Bid #23-0005PW, for the amount of $1,037,595.25.) 2. Evaluation of Bids – Williams Park Storm Pipe Replacement (Jason Lyon, Director of Water and Wastewater) (Staff recommendation: award contract to Gateway Construction, Inc. for the Williams Park Storm Pipe Replacement, ITB #23-0004PW, for $148,000) 1

COUNCIL COMMITTEE OF THE WHOLE MEETING - January 10, 2023 PAGE 2 3. Annual Review and Approval of Governing Policy for Energy Commodity Risk Management (Lori Peddicord, Controller/Treasurer) (Staff recommendation: approve the proposed amendments to the Governing Policy for Energy Commodity for Risk Management) ADJOURNMENT OF THE UTILITY COMMITTEE MEETING SAFETY ADVISORY AND TRANSPORTATION COMMITTEE ADOPTION OF THE AGENDA 1. Dover Roundabout Analysis for Governors Boulevard, Ross Street, and Bradford Street (Sharon Duca, Assistant City Manager) (Staff recommendation: for Council to receive public input regarding the options presented and to allow for additional research into low-impact traffic calming options) ADJOURNMENT OF THE SAFETY ADVISORY AND TRANSPORTATION COMMITTEE MEETING LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE ADOPTION OF THE AGENDA 1. Draft Annual Comprehensive Financial Report (ACFR) (Lori Peddicord, Controller/Treasurer) (Staff recommendation: Staff recommends acceptance of the draft report) 2. Library Rebranding Presentation (Brian Sylvester, Library Director) (Committee Action Not Required) ADJOURNMENT OF THE LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE MEETING ADJOURNMENT OF THE COUNCIL COMMITTEE OF THE WHOLE THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. PURSUANT TO 29 DEL. C. §10004(e)(2), THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS, WHICH ARISE AT THE TIME OF THE MEETING 2

Item 1. CITY OF DOVER, DELAWARE ACTION FORM PROCEEDING: Council Committee of the Whole (Leg & Fin) DEPARTMENT OF ORIGIN: Water & Wastewater SUBMITTED ON: December 30, 2022 PREPARED BY: Jason A. Lyon, P.E., Director of Water & Wastewater / Engineering Services REVIEWED BY: David S. Hugg, III, City Manager and Lori Peddicord, Controller / Treasurer SUBJECT: Evaluation of Bids – FY 2023 Street and Alley Program TIMETABLE: Notice to Proceed to be issued within thirty (30) days of Council approval. Project anticipated to be completed within one hundred and twenty (120) calendar days from issuance of Notice to Proceed, weather permitting. RELATED PROJECT: X REFERENCE: CIP- General Fund Projects EXPENDITURE REQUIRED: $1,037,595.25 AMOUNT BUDGETED: $1,200,000.00 FUNDING SOURCE (Dept./Page in CIP & Budget): Department of Public Works Streets Division – CIP page 190, ST2301 Street, Concrete and Alley Program, ARPA Account No.: 210-10- 99-99-000-54031. STAFF RECOMMENDATION: Award the contract to Sam’s Construction, LLC, for the City of Dover FY 2023 Street and Alley Program, Bid #23-0005PW, for the amount of $1,037,595.25. BACKGROUND AND ANALYSIS: The Fiscal Year 2023 Capital Improvement Plan includes funding for the FY 2023 Street, Concrete and Alley Program which is proposed to rehabilitate various pavement and concrete sections throughout the City of Dover. The total length of scheduled street repaving is approximately 0.99 miles. Included in this program are N. West Street Alley (from Walker Road to William Street), S. Independence Blvd. (from Forrest Street to S. Farmview Drive), Townsend Blvd. (from N. Dupont Hwy. to end) and Townsend Blvd. Valley Gutter (from end of road to 85’east of end of road). The bid was advertised to the public as an Invitation to Bid in accordance with the City’s purchasing policy by the City’s Purchasing Agent under ITB #23-0005PW. Bids were opened on December 8, 2022. The City of Dover received three (3) bids, unfortunately two (2) submissions were deemed non- responsive. The one (1) responsive bid is shown in the table below: 3

Item 1. BID PRICE EVALUATED CONTRACTOR LOCATION PRICE SAM’S CONSTRUCTION, LLC WILMINGTON, DE $1,037,595.25 $1,006,467.39 *Sam’s Construction, LLC was awarded a three percent (3%) reduction due to local vendor preference. City staff reviewed the submission and found that Sam’s Construction, LLC bid met all requirements for the qualifications of the project. Staff recommends awarding the contract to Sam’s Construction, LLC in the amount of $1,037,595.25for the FY 2023 Street and Alley Program. 4

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Item 2. CITY OF DOVER, DELAWARE ACTION FORM PROCEEDING: Council Committee of the Whole (Utility) DEPARTMENT OF ORIGIN: Water & Wastewater SUBMITTED ON: December 2, 2022 PREPARED BY: Jason A. Lyon, P.E., Director of Water & Wastewater / Engineering Services REVIEWED BY: David S. Hugg, III, City Manager and Lori Peddicord, Controller / Treasurer SUBJECT: Evaluation of Bids – Williams Park Storm Pipe Replacement TIMETABLE: Notice to proceed to be issued within thirty (30) days of Council approval. Project anticipated to be completed in sixty (60) calendar days. RELATED PROJECT: X REFERENCE: X EXPENDITURE REQUIRED: $148,800 AMOUNT BUDGETED: $85,000 FUNDING SOURCE (Dept./Page in CIP & Budget): Department of Public Works – Stormwater, CIP Project #SW2301 CIP Name: Emergency Storm Sewer Repairs Account No.: 101-12-18- 60-000-54031. Shortfall of funds will be covered by the surplus of funds from the Meeting House Branch Improvement Design Project, CIP ST2003, Account Number 101-12- 18-35-000-54030. STAFF RECOMMENDATION: Award contract to Gateway Construction, Inc. for the Williams Park Storm Pipe Replacement, ITB #23- 0004PW, for $148,000. BACKGROUND AND ANALYSIS: An internal maintenance and engineering analysis was performed on the stormwater infrastructure that runs along the southeasterly property line of Williams Park and discharges into the White Oak Tax Ditch. The analysis was performed due to the erosion of the downstream tax ditch. The city’s stormwater inventory showed there were two (2) thirty-inch (30”) Corrugated Metal Pipes (CMP) running parallel to each other, discharging into the White Oak tax ditch. However, when the Streets and Stormwater Division personnel went to replace a 30’ section of the corroded CMP, only one CMP was unearthed. The Department of Water & Wastewater was asked to assist by taking a video of the pipe where it ties into an existing catch basin. The video process had to be abandoned, since the bottom of the pipe was too 9

Item 2. corroded. After several heavy rainfalls, the bank continued to erode and eventually the second 30” CMP was uncovered several feet back from the bank of the ditch. The recommendation was to replace both 30” pipes and the two catch basins that they run through from the existing catch basin to the ditch. This project was not listed as a project in the current Capital Improvement Plan, however the condition merits repair. The bid listed three (3) options for the pipe replacement, and they are as follows: Option A – 30” Corrugated Metal Pipe (CMP) Option B – 30” High Density Polyethylene Pipe (HDPE) Option C – 30” Reinforced Concrete Pipe (RCP) Staff recommends using the most cost effective, Option B -30” High Density Polyethylene Pipe (HDPE). This is the most cost effective due to the lack of corrosion that the CMP would gather, and the price of RCP is significantly higher than HDPE. The base bid prices shown in the table below reflect the bids submitted for this option. The bid was advertised to the public as an Invitation to Bid in accordance with the City’s purchasing policy by the City’s Purchasing Agent under ITB #23-0004PW. Bids were opened on November 15, 2022. The City of Dover received nine (9) bids, with five (5) bids being non-responsive. The four (4) responsive bids are shown in the table below: EVALUATED CONTRACTOR LOCATION BASE BID PRICE GATEWAY CONSTRUCTION, INC. HARTLY, DE $148,000 $148,000 MITTEN CONSTRUCTION CO. DOVER, DE $209,790 $203,496.30* TEAL CONSTRUCTION, INC. DOVER, DE $188,405 $182,752.85** TRU-GRIT, LLC SMYRNA, DE $211,982 $211,982 *Mitten Construction Co. was awarded a three percent (3%) reduction due to minority vendor preference. **Teal Construction, Inc. was awarded a three percent (3%) reduction due to local vendor preference. The shortfall will be covered by the following breakdown: Funding Description Current Spent / Savings / Requested Proposed Source Budget Encumbered Remaining Change Budget Remaining General – SW2301 – $85,000 $24,000 $61,000 $87,000 $148,000 Stormwater Emergency Storm Sewer Repairs General – ST2003 – Meeting $707,500 $362,810.40 $344,689.60 ($87,000) $257,689.60 Streets House Branch Improvement City staff reviewed the submissions and found that Gateway Construction, Inc. bid met all requirements for the qualifications of the project. Staff recommends awarding the contract to Gateway Construction, Inc. in the amount of $148,000 for the Williams Park Storm Pipe Replacement Project. 10

Item 2. EXISTING INLET BASIN PROJECT AREA WITH DOUBLE GRATE TO BE REMOVED AND REPLACED EXISTING INLET BASIN ± WITH SINGLE GRATE TO BE REMOVED AND 3 0' REPLACED 3 (2) EXISTING PIPES TO BE REMOVED AND REPLACED WILLIAMS PARK STORM PIPE REPLACEMENT DEPARTMENT OF PUBLIC WORKS DRAWN: R.L.L. DATE: 09-15-22 11 CKD: --- SCALE: N.T.S. APRVD: --- DWG. NO: C-1

Item 3. CITY OF DOVER, DELAWARE ACTION FORM PROCEEDING: Council Committee of the Whole (Leg & Fin) DEPARTMENT OF ORIGIN: Finance office SUBMITTED ON: November 18, 2022 PREPARED BY: Lori Peddicord, Controller/Treasurer REVIEWED BY: Dave Hugg, City Manager and Paul Waddell, Electric Director SUBJECT: Governing Policy for Energy Commodity for Risk Management TIMETABLE: Annual Review and Approval. RELATED PROJECT: EXHIBITS Exhibit A – Governing Policy Exhibit B – Dover Notional Transaction Limits (explanation purposes only) STAFF RECOMMENDATION: Approve the proposed amendments to the Governing Policy for Energy Commodity for Risk Management BACKGROUND AND ANALYSIS: This Policy provides oversight to the Dover management team and TEA (The Energy Authority) in conducting and transacting business on behalf of Dover utility. The Policy provides a framework and delegation of responsibilities to guide and administer the activities related to Dover’s energy commodity risk management. The Policy establishes organizational structure, delegates responsibility, and establishes internal controls and procedures to ensure transactional and oversight activities are conducted in compliance with the Policy and in accordance with the City’s normal operations, regulatory reporting and legal requirements relating to energy assets and transactions. There are several small revisions to the Policy consisting of basic housekeeping items in keeping with the current market and standard terms in relation to risk management. The most significant change requested with this annual review is found on page 14 of the Policy under Risk Limits and Risk Measurement Subparagraph 1. Delegation Authority. The Energy Risk Management Committee (ERMC) is requesting Council approve an increase in the notional value limit from $20 million to $40 million for the Dover ERMC in committing to financial obligations. We have continued to see significant increase in the forward market pricing which has continued to erode the purchasing power of the ERMC. This erosion reduces the purchasing capability of the ERMC which is why we bring this change before you this year. Exhibit B - Dover Notional Transaction Limits Evaluation provides a great visual of the reduced purchasing power - historical (8/24/15) vs current market (9/9/22). 12

Item 3. EXHIBIT A City of Dover, Delaware Governing Policy For Energy Commodity Risk Management Effective: September 27, 2021TBD Approved by: City of Dover Council (Last Revision September 27, 2021August 10, 2020) 13

Item 3. TABLE OF CONTENTS PURPOSE OF THE RISK MANAGEMENT POLICY ..................................................................4 A. Introduction.....................................................................................................................4 B. Scope of Policy ................................................................................................................4 C. Objectives and Risk Philosophy ...................................................................................5 D. Policy Administration....................................................................................................6 DISCUSSION OF RISKS ...............................................................................................................6 MANAGEMENT AND CONTROLS .............................................................................................7 A. Utility Committee of The City Council .......................................................................7 B. Executive Risk Management Committee ....................................................................8 1. City Manager ................................................................................................................. 9 2. Director of the Utility ................................................................................................ 109 3. Controller...................................................................................................................... 10 4. TEA Client Services Manager .................................................................................... 10 MARKETING AND TRADING PRACTICES ............................................................................11 A. Standards of Conduct ..................................................................................................11 B. Products, Activities and Limitations .....................................................................1211 C. Contract Documentation and Confirmations.......................................................1312 D. Training..........................................................................................................................13 E. New Product Protocol .................................................................................................13 RISK LIMITS AND RISK MEASUREMENTS .......................................................................1413 A. Limits..........................................................................................................................1413 1. Delegation Authority .............................................................................................. 1413 2. Volume Limits ............................................................................................................. 14 3. Locational Limits ......................................................................................................... 14 B. Stress Testing and Back Testing .............................................................................1514 C. Instances of Exceeding Risk Limits ........................................................................1514 CREDIT POLICY ......................................................................................................................1514 A. Measuring Credit Risk .............................................................................................1514 B. Analysis and Extension of Credit Limits ..................................................................15 C. Instances of Exceeding Credit Limits ....................................................................1615 REPORTING .................................................................................................................................16 A. Risk Reporting ..............................................................................................................16 B. Credit Reporting ...........................................................................................................18 C. Hedge Effectiveness Reporting ..................................................................................18 INFORMATION TECHNOLOGY SYSTEMS ............................................................................18 2 14

Item 3. POLICY DISTRIBUTION AND COUNSEL ...........................................................................1918 A. Distribution Outside The City ................................................................................1918 B. Designated Counsel .................................................................................................1918 APPENDIX A – Approved Products .............................................................................................20 APPENDIX B – Approved Counterparties and Threshold Tables ................................................21 APPENDIX C – Business Risks ....................................................................................................26 APPENDIX D – Glossary ..........................................................................................................2827 APPENDIX E – Swap Transaction Representative ...................................................................3029 3 15

Item 3. PURPOSE OF THE RISK MANAGEMENT POLICY A. Introduction The City of Dover (“City”) and its customers are routinely exposed to commodity risk, counterparty risk, process risk, budget risk, and regulatory risk – herein referred to collectively as Energy Commodity Risk - in the normal conduct of serving its electric load requirements. Volatility of energy commodity prices and volumetric uncertainty (either supply/generation or load obligations) impose a substantial and direct risk to the City’s financial and operating performance. By authority of its charter, the City has responsibility for overseeing the City’s electricity operations, including the management of its cost of serving Dover’s customers with primary operational management authority vested in the City Manager (Dover City Charter §40). By agreement (the “EMA”) dated May 6, 2011 and approved by the City, the City has engaged The Energy Authority, Inc. (“TEA”) to assist the City with Asset Management and Strategic Planning Services, Risk Management Services, and Energy Management Services. This Policy for Energy Commodity Risk Management (“Policy”) is established the explicit understanding that the City has retained and delegated responsibilities to TEA to provide Risk Management Services. Additionally, the City has issued this Policy for dealing with the philosophy, framework and delegation of responsibilities necessary to govern activities related to Dover’s energy commodity risk management. As set forth herein, the City has established an organizational structure, delegated responsibility and established internal controls and procedures to ensure that all transactional and oversight activities are conducted in compliance with this Policy and in accordance with the City’s normal reporting, legal, financing and regulatory requirements relating to energy assets and transactions. B. Scope of Policy This Policy covers all transactions entered into by the City of Dover designed to meet the City’s electric load requirement and the management of risk related to these transactions. In the event of conflict between this Policy and the EMA, the more restrictive document shall control. 4 16

Item 3. This Policy is separate and distinct from enterprise risk management policies and procedures addressing the City’s safe operation of its generating stations and energy infrastructure, insurance requirements, permit compliance, employee matters regulatory compliance with laws and regulations of the State of Delaware and Federal Agencies such as EPA, FERC, NERC and CFTC or other potential risks to the City beyond the purchase and sale of fuel and electric power and its ancillary products. Unless otherwise explicitly stated in this Policy, or other policies approved by the Utility Committee, this Policy applies to all power and fuel procurement and related business activities that may impact the energy market risk profile of the City. This policy documents the framework by which management and staff will:  Identify and quantify risk  Develop and execute procurement strategies  Create a framework of controls and oversight  Monitor, measure, and report on the effectiveness of the risk management C. Objectives and Risk Philosophy The objectives of the Policy are to identify Energy Commodity price and credit risk exposures and give the City a framework for the quantification and management of these exposures. The Policy will identify the reports needed to convey how the identified risk exposures can potentially impact the City’s overall cost of providing electricity service to its customers and report on the risk management of the transactions associated with City’s electric load requirements. Under the Policy, risk management activities will be conducted consistent with the City’s overall objective of appropriate risk management. There are several objectives of the Policy which, when taken and executed together, serve to manage the City’s energy commodity price exposures. Specifically, the Policy:  Establishes framework for developing credit limits for counterparties and quantifies and manages the credit exposures related to potential counterparty abrogation  Quantifies the impact of the energy commodity price and credit risk exposures on City’s financial results  Manages the impact of the above exposures in line with the City’s identified level of risk tolerance  Provides clear delineation of responsibilities and authority, outlines a separation of duties, and ensures reporting of risk is timely and accurate.  Ensures that the impact of any action affecting the City’s position is consistently quantified, monitored and authorized. 5 17

Item 3. The City’s risk management activities will be conducted consistent with its overall objective of appropriate risk mitigation and never for purposes of speculation. D. Policy Administration This Policy has been approved by the Executive Risk Management Committee and The Utility Committee of the Dover City Council Committee of the Whole. The Utility Committee must approve modifications to the Policy, with the exception of the appendix information which can be modified with the approval of the Executive Risk Management Committee. DISCUSSION OF RISKS This Policy covers the management of all material energy market risks faced by the City. A comprehensive list of risks that are or could be relevant to the City is shown in Appendix C of the Policy. Among the most critical of these risks are commodity risk, counterparty risk, process risk, volume risk, and budget risk. These risks are measured by the limit structure and controls outlined in the Policy. Commodity risk represents the potential adverse impacts to the value of the City’s portfolio due to changes in the market or government policy. Commodity risk encompasses volatility risk, forward price risk, basis risk, correlation risk and liquidity risk. Volatility risk is incurred by sudden changes to the cost and value of market instruments. Forward Price Risk is the impact of future prices differing from historical prices as well as the potential for changing prices to result in mark-to-market exposure. Basis risk is incurred whenever prices differ between procurement and consumption location for power or fuel products. Correlation Risk is a reflection that multiple assets may experience varying degrees of similar movement which may change over time. Liquidity Risk is experienced when a commodity may be less available to buy or sell due to counterparties being unable or unwilling to transact a commodity in a normal timeframe. without altering the pricing of that commodity. Counterparty risk represents the potential losses the City could incur due to delivery risk and receivable risk. Delivery risk stems from a supplier or trading counterparty that is unable or unwilling to perform on its commitments including but not limited to delivery or receipt of commodities which would require the City to procure alternative supply at market prices. Receivable Risk includes the City’s risk associated with a counterparty’s timeliness of payment for services rendered. Process risk represents the risks associated with process problems including, but not limited to, inaccurate data capture, untimely trade execution or incorrect settlement. 6 18

Item 3. Controls over process risks are embedded in the organizational structure of TEA through the design processes and operating procedures. Volume Risk represents the potential for unforeseen changes from projections of excess or shortfall of capacity or energy from the actual needs. When variances are large coupled with large costs to transact and adverse moves in market prices this risk could be realized. In management of this risk, the City must be aware of the fact that unexpected variations in volume are often highly correlated with price movements. compounding the impact of volume in a phenomenon known as Covariance Risk. Budget Risk represents the potential to deviate outside of tolerable bounds of the City’s budget. Deviations from budget can be caused by forecast error or unforeseeable adverse changes in market prices. Regulatory Risk arises from participation in regulated markets. With the Independent System Operator (ISO) implementation of Federal Energy Regulatory Commission (FERC) Order 741, the City faces increasing regulatory risk when participating in wholesale energy markets. The TEA Compliance department works in conjunction with the TEA Risk Control department to help the City manage regulatory risk. Regulatory risk is managed by:  Annual Compliance Training for all employees participating in regulated markets;  Integration of the appropriate compliance culture within the Trading department through ongoing interaction between Compliance and Trading;  An independent monitoring and exposure measurement on transactions that could trigger an increase in regulatory risk. MANAGEMENT AND CONTROLS This Policy articulates the management and organization of the City and TEA to serve as a control framework outlining delegation of duties and responsibilities. A. Utility Committee of The City Council The Utility Committee of The City Council Committee of the Whole (The Committee) has a responsibility to provide approval of this Policy. With this approval, The Committee also assumes additional duties. The Committee will understand the risks the City is and could be exposed to due to their energy commodity risk management activities. In this role, the Committee will have a responsibility to also understand the City’s policies and procedures, internal controls and systems which are used to help manage the City’s energy commodity risks. 7 19

Item 3. The Committee will approve any amendments to the Policy or limits within. The Executive Risk Management Committee will update the Committee periodically regarding the Policy and its functions. It will be the Committee’s responsibility to:  Discuss guidelines and strategic policies that govern the process by which the Energy Risk Management Committee assesses and manages risks  Review and approve the Policy at least annually  Approve new members of the Executive Risk Management Committee  Acknowledge the risk inherent in transactions covered under this Policy B. Executive Risk Management Committee An Executive Risk Management Committee (“ERMC”) has been formed to provide executive management oversight for the City’s energy commodity risk management activities. The ERMC is charged with the creation, amendment and administration of this Policy, including acquiring any approvals required by the Committee, and will ensure that all energy commodity risk management activities of the City are performed consistent with this Policy. The ERMC will meet at least monthly to review compliance and conduct its business as described in this Policy. The ERMC shall be comprised of the following voting members: The City Manager, The Electric Director, The City’s Controller and TEA’s Client Service Manager. When the City Council or City Manager has appointed an interim for any of the EMA’s position, they shall immediately become the new representative on the ERMC. The City’s ERMC will make decisions following the process outlined in this Policy. TEA’s Client Services Manager may include representatives from other areas within TEA in the monthly ERMC meetings who will attend in person or by conference call, Internet, or other electronic means, as non-voting advisors. Other City employees and TEA staff may also be asked to attend meetings from time-to-time, as the ERMC deems necessary. The responsibilities of the ERMC shall include:  Establish scope and frequency for management reporting to the Utility Committee based on agreement between the Utility Committee and ERMC.  No less than annually, review the City’s Energy Commodity Policies and Procedures for correctness and completeness.  Review and approve any new risk report or change to an existing risk report provided by TEA to monitor risks outlined in this Policy.  Understand and approve any models, methodologies, and assumptions used for measuring risks such as volume risk, process risk, counterparty risk and commodity risk. 8 20

Item 3.  Monitor the City’s risks and ensure they are within the limits and are being managed according to what is indicated within the City’s Policy and associated procedures  Understand the City’s risk management objectives and risk tolerances.  Review and approve the risk management and trading strategy programs and associated risk. Each program should be reviewed to ensure alignment with Policy objectives and compliance with risk limits within this Policy.  Periodically review any risk management program approved in light of recent market changes, and ensure continued compliance with its established guidelines  Review and approve new products, markets, trading counterparties and credit limits  Review all violations and exceptions to this Policy and report such to the Committee.  Approve the individuals or companies that engage in the City’s commodity transactions and are subject to the limits within this Policy.  Ensure that the individuals or companies authorized to transact on behalf of the City as well as manage its risks, are appropriately trained and qualified.  Ensure independence and segregation of duties between front, middle and back office at TEA.  Recommend changes to this Policy to the City’s Utility Committee for approval and ensure the Utility Committee understands the City’s overall compliance with this Policy and associated procedures.  The ERMC will meet at least monthly to review risks identified and reported on by the Policy, this meeting shall be chaired by The City Manager. Minutes of each meeting of the ERMC shall be recorded and reflect any decisions and follow-up action items to be performed. These minutes will be reviewed and approved by the members of the ERMC in a timely manner. Each member of the ERMC has a unique role as defined below: 1. City Manager The City Manager is independent of all commercial functions and carries the responsibility of establishment and maintenance of risk management for the City. The City Manager will be a voting member of the ERMC and act as a chair of the ERMC. Other responsibilities include:  Ensure this Policy is maintained.  Oversee reviews of the City’s energy commodity risks, limits, risk measurement methodologies and models, and programs and recommend changes to the ERMC.  Ensure potential transactions and their impacts on the City’s risks and limits defined within this Policy. 9 21

Item 3.  Develop and monitor the implementation of the Policy, and oversee other risk management processes and procedures established by this Policy or otherwise by the ERMC.  The City Manager shall name an alternate to be approved by The Committee. 2. Electric Director The Electric Director of the Utility has oversight for all trading, hedging, pricing, structuring, and market and operational risk management activities associated with the City. The Electric Director of the Utility will be a voting member of the ERMC. Other responsibilities include:  Review the effectiveness of transaction processing systems and procedures relating to risk measurement.  Recommend operational risk and business risk assessment guidelines.  The Electric Director of the Utility shall nominate an alternate to be approved by The Committee. 3. Controller The Controller is independent of all commercial functions and carries the oversight responsibilities associated with the City’s accounting practices. The Controller will be a voting member on the ERMC. Other responsibilities include: Commented [KG1]: Does the Controller have oversight of the PILOT?  Perform financial accounting including accounting for hedging and derivatives activities.  Comply with tax rules and make appropriate tax elections.  Record realized and unrealized gains and losses.  Reconcile general ledger, cash transactions and margin accounts.  Implement tax-hedge accounting policies and other regulatory tax requirements.  Develop and maintain documentation outlining standard procedures for conducting business.  Invoice counterparties and resolve billing disputes.  Perform daily/weekly/monthly transaction checkout with counterparties.  Develop and maintain documentation outlining standard procedures for conducting business.  The Controller shall nominate an alternate to be approved by the Committee. 4. TEA Client Services Manager 10 22

Item 3. The TEA Client Service Manager roles and responsibilities are defined Exhibit B of the EMA between the City and TEA. The TEA Client Service Manager will be a voting member on the ERMC. Other responsibilities include:  Monitor risk reports between ERMC meetings.  Report to the Committee and the ERMC on the City’s adherence to all limits and functions within this policy.  Engage the ERMC in discussions regarding events or developments that could expose the company to potential losses.  Recommend to the ERMC specific risk limits consistent with the City’s risk management objectives, risk tolerance, and risk management policy.  Coordinate and distribute independent market fundamental analysis.  Provide advisory support and recommendations as specified in Article 5 of the EMA.  Update RMC on training of TEA employees.  TEA shall nominate an alternate to be approved by the Committee. Alternates may vote, but only in the absence of the voting member for whom they serve. A person may serve for an alternate for more than one official, but they can only cast one vote. A quorum for a meeting shall be any combination of three voting members and alternates. A simple majority of votes is necessary to approve any action of the ERMC, but at least two voting members must approve the action. Members and alternates may attend by electronic means and count as present for the purpose of quorum and for a majority for a decision. MARKETING AND TRADING PRACTICES A. Standards of Conduct Individuals authorized to transact for the City shall not misrepresent, conceal or withhold information regarding energy commodity trading and risk management transactions to any person responsible for the accurate recording and/or reporting of such transactions; participate in any such transaction or similar activity for the benefit of any party other than the City; or hold or be a beneficiary of any financial interest in any entity with which the employee is engaged in trading or other business activity (other than ownership of an interest in a mutual fund managed by another party). Commented [KG2]: Are there Dover or Delaware ordinances to reference on this? Further, no employee authorized to place or execute such transactions may engage in 11 23

Item 3. trading power or energy commodities derivative instruments for his or her personal account. It is the expressed intent of this Policy to prohibit the acquisition of risk beyond that encountered in the efficient optimization of the City’s generation and load portfolio and execution of procurement strategies. As such, speculative transactions are prohibited. In the course of developing operating plans and conducting management activities, the City recognizes that expertise must be employed by TEA staff, and it is not the intent of this Policy to restrain the legitimate application of analysis and market expertise in executing procurement strategies intended to minimize costs within the constraints of this Policy. If any questions arise as to whether a proposed transaction(s) constitutes speculation, TEA shall conduct an analysis of the transaction and the ERMC shall review the transaction(s) to determine whether the transaction(s) would constitute speculation and document its finding in the meeting minutes. Commented [KG3]: Are there Dover charter or state laws that govern this? B. Products, Activities and Limitations Pursuant to achieving the City’s core objectives for the purpose of energy commodity risk management, the following limitations shall apply.  Permissible instruments will be restricted to the products and instruments specified in Appendix A – Approved Products of the Policy; o All physical forward transactions shall be governed by the Edison Electrical Institutive (EEI), North American Energy Standards Board (NAESB), International Swap Dealers Association (ISDA), or similar agreements with counterparties approved by the City. o The City reserves the right to enter into financial hedge transactions to effectuate Policy objectives, but does not authorize TEA to enter into financial hedge transactions on its behalf. Any such financial transactions that the City may enter into shall be governed by ISDA agreements with counterparties as approved by the City.  The maturity for each permissible instrument will be restricted to the maturity limits specified in the risk limits section of the Policy.  Transaction volumes for each risk management transaction will be restricted to the amounts specified in the Risk Limits section of the Policy.  Risk management transactions will be outlined in the City of Dover Hedge Program which will be approved by the ERMC. Risk management transactions will include the following: o Managing the forward price of purchased power for delivery to the City as needed to meet its electric load requirements. o Managing the forward price of natural gas and fuels as needed to generate power to meet the City’s electric load or generation requirements. 12 24

Item 3. o Unwinding or modification of hedges to accommodate changes in expected load requirements, or for economic reasons subject to explicit constraints set by the ERMC. C. Contract Documentation and Confirmations No over-the-counter transaction may be executed until an EEI, NAESB, ISDA, or similar agreement has been authorized by the City, approved by the ERMC and fully executed by the parties. Written confirmations will be required from counterparties, as defined in the Master Service Agreement between the City and counterparty. Contemporaneous with any commitments and prior to receipt of written confirmations, verbal commitments shall be memorialized internally as to instrument structure, quantity, relevant time horizon, price and any other relevant terms; such internal documentation shall be time stamped and correlated to the ultimate written confirmation to or from the counterparty. Both the internal documentation as well as the written confirmation from the counterparty shall be provided to TEA’s Risk Control Group immediately upon receipt for verification. In the event that there is a material failure to provide timely documentation or confirmations, then at the City Manager’s sole discretion, the offending individual’s or counterparty’s authorization may be suspended. Similarly, if the failure to provide timely documentation or confirmations is due to the failure of counterparty, then at the discretion of the City Manager, a moratorium may be imposed on transactions with that counterparty. In such cases, the City Manager shall notify the ERMC of the issues leading to the suspension or moratorium. Nothing herein shall inhibit any ERMC Member from bringing control issues to the TEA’s Client Services Manager prior to a decision on materiality or the imposition of a suspension of trading privileges or counterparty moratorium. D. Training The ERMC will ensure that all City employees and/or TEA Staff that will execute transactions on behalf of the City will have appropriate training in the markets in which the transactions occur. E. New Product Protocol 13 25

Item 3. As required to manage the City’s energy commodity risk the ERMC shall approve new products provided the requirements of the New Product Approval Procedure are met. RISK LIMITS AND RISK MEASUREMENTS A. Limits The limit structure is designed to quantify the types of risk in the City’s energy commodity portfolio. The City will manage and report on its energy commodity market risk using Delegation of Authority Limit, a Volume Limit and a Locational Limit. 1. Delegation Authority The Utility Committee delegates the following approval authority limits to the Dover ERMC. The ERMC may not delegate these authorities to individuals authorized to commit Dover to financial obligations. Position Maturity Limit Term Limit Notional Value Limit Dover ERMC 5 years 5 years 20,000,000 TEA 1 month 1 month 1,000,000 Position Maturity Limit Term Limit Notional Value Limit Dover ERMC 5 years 5 years 40,000,000 TEA 1 month 1 month 1,000,000 This limit structure is not intended for use when transacting day-ahead and real time in the PJM market. 2. Volume Limits No transaction shall be executed that exceeds the City’s electric load requirements other than operation of generation consistent with PJM activities. If there is an adjustment to the City’s electric load requirements and the existing transactions greater than 100% of the adjusted electric load requirements the ERMC will review and approve the offsetting strategy deployed in sufficient proportion to mitigate the encroachment. 3. Locational Limits Non-Commodity Transactions must support the requirement of one of the City’s generation units, native load, or transaction locations. 14 26

Item 3. B. Stress Testing and Back Testing The City’s positions shall be periodically stress tested and models shall be back tested. The processes around these tests are outlined in the Stress Testing and Back Testing Procedure. C. Instances of Exceeding Risk Limits Should the City or TEA enter into a transaction that causes the portfolio to exceed any above mentioned limits the Electric Director shall, in addition to notifying the ERMC, also notifyERMC shall notify the Chair of The Committee as soon as practicable and shall provide periodic reports to the Chair on the status the transactions for as long as the City is exceeding its limits. The ERMC will review and determine whether any liquidation or offsetting of transactions is warranted. The incident will be documented as a Policy Exception by the Electric DirectorERMC . CREDIT POLICY Credit Risk is the risk due to the uncertainty in a counterparty’s ability to meet its contractual obligations. The primary objective of this credit policy is to manage, to the extent commercially reasonable, the credit risks associated with transactions covered in this Policy while still allowing the City to achieve its objectives. A. Measuring Credit Risk The status of credit risk will be measured and reported through reports provided by TEA. The current credit exposure will be reported at the agreement level via a Counterparty Credit Report provided by TEA. This information will be made available to TEA trading personnel so that it can be checked prior to executing transactions for the City. Those responsible for risk oversight at the City and TEA will have access to this information no less frequently than once per day. The ERMC will monitor overall credit utilization and any credit exceptions at least monthly. When measuring the current credit risk, netting will be applied to the exposure if the City’s contract with a counterparty includes provisions for netting. B. Analysis and Extension of Credit Limits Physical and financial commodity transactions will be executed with counterparties approved by the ERMC with credit available to support the transactions. The 15 27

Item 3. creditworthiness of a counterparty will be determined by both qualitative and quantitative factors. Factors shall include, but not limited to:  A company’s debt credit ratings provided by the rating agencies.  Financial data such as an analysis of the income statement, balance sheet, and cash flow, as well as liquidity and capital structure.  Subjective factors such as company’s fuel diversity, overall size, risk management policy and internal controls, geographic diversity, and market intelligence. A credit limit is the amount of unsecured credit granted to a counterparty. Unsecured credit exposure includes amounts owed by the counterparty, whether billed or not, and the mark-to-market differences in value in excess of any collateral which the counterparty has provided the City. Any net exposure above the collateral threshold will require the posting of additional collateral by a counterparty. or an exception from the ERMC. Further information on the City’s procedure for establishing credit is contained in the Counterparty & Credit Review Process. Collateral thresholds, term limitations and credit exposure limits will be subject to the maximums indicated in Appendix B, based upon the lower of the S&P and Moody’s credit ratings. At no time will the City incur a credit exposure with any counterparty greater than $60,000,000 other than PJM. C. Instances of Exceeding Credit Limits The City and TEA are restricted by the credit limits approved by the ERMC. The ERMC can suspend trading with a counterparty, if that counterparty’s credit limit has been reached or exceeded. The City or TEA traders shall not exceed the Counterparty Credit Limit by executing transactions with any counterparty without approval of the ERMC. The ERMC will determine when it’s appropriate to require additional collateral if a counterparty’s credit exposure exceeds its credit limit. Collateral includes standing letter of credit, cash, and prepayments. All credit exceptions will be documented and reported to the ERMC and the Committee as Policy Exceptions. REPORTING A. Risk Reporting 16 28

Item 3. Preparation of timely reports is critical to monitoring risk. TEA will furnish the required reports on a regular frequency for the City in a format acceptable to the ERMC. In addition, the ERMC and its designees will be provided access to the City’s risk reports as updated daily via TEA’s secure Web Portal. Reports required on a monthly basis and for periodic meetings of the ERMC include the following:  Profit and Loss Report The Profit and Loss (P&L) Report shows the daily realization of transactions at either the transaction price or the market price as transactions roll from unrealized to realized. This report should show volumes, transaction prices and market prices of realized physical and financial power and fuel transactions.  Mark to Market Report The Mark to Market (“MTM”) Report conveys the potential transaction exposure, of all existing forward transactions executed, if the energy commodity portfolio was liquidated at the most recent market settlement prices. This report should show volumes, transaction prices and market prices of unrealized physical and financial power and fuel transactions.  Daily Activity Report The Activity Report presents a summary of the day’s trades executed in the bilateral energy market.  Cost of Service Report The City’s exposure to energy price risk shall be monitored and reported on a Cost-of- Service basis. All calculations are at the wholesale level. The Cost-of-Service recognizes all prior (expired) months within the Power Year on the basis of actual (incurred) costs, and recognizes all forward (pending) months within the Power Year on the basis of expected forward power and fuel prices and expected forward load-following risks. As defined below, the Cost-of-Service is an aggregation of Forward Energy Commodity Portfolio Cost, the Load Following Cost Expectation and the City’s Budget Target for Purchase Power Expense. o The Net Purchased Power Cost shows the net cost of all physical and financial transactions related to the City’s anticipated commodity requirements for power and fuel and is based on the price of all hedge transactions plus the forward market price of all unhedged transactions valued at current forward prices for energy commodities, customer-level cost per MWH of all physical and financial transactions related to Dover’s actual plus anticipated energy. o The expected fixed costs defined as load-serving entity (LSE) capacity costs, transmission costs and TEA management fees. 17 29

Item 3. o The Expected Load-Following Cost for a specified power year is defined as the expected cost (or revenue) associated with intra-month load variations due to weather or other events affecting demand. The ERMC will update the Expected Load Following estimate while lack of necessary market information persists no less than annually. o The Budget Target for Purchase Power Expense represents the City’s view of expected purchase power expense. B. Credit Reporting  Counterparty Credit Report The Counterparty Credit Report conveys the exposure to all counterparties with which the City has credit exposure resulting from its energy commodity risk management activities.  CFTC Reporting The City understands that transacting over the counter (OTC) swaps carries an additional Commodity Futures Trading Commission (CFTC) reporting function. Once required by the CFTC, the City will report on how the City generally meets its financial obligations associated with entering into non-cleared swaps in a manner acceptable to the CFTC. C. Hedge Effectiveness Reporting If the City’s transactions require a hedge effectiveness test, those testing results will be reported to the ERMC no later than one month after the end of the financial reporting period. The report will include a summary of testing methodology, assumptions of the testing and the outcome of results with a pass or fail by transaction. INFORMATION TECHNOLOGY SYSTEMS TEA’s Middle Office will maintain a set of records for all transactions executed in association with City procurement activities. The records will be maintained in US Dollars and transactions will be separately recorded and categorized by type of transaction. The system of report shall be auditable. The following safeguards for data security and backup will be installed:  Transaction data stored in the system of record will be replicated daily to ensure data redundancy;  The TEA Energy Trading Risk Management database will be backed up at least daily. 18 30

Item 3. POLICY DISTRIBUTION AND COUNSEL A. Distribution Outside The City The City’s Policy is restricted to the use of the City and TEA organizations. It shall not be distributed outside these organizations without the consent the ERMC. B. Designated Counsel Questions about the interpretation of any matters of this Policy should be referred to ERMC. The ERMC will provide clarification and explanation on any updates to this Policy. All legal matters stemming from this Policy will be referred to the City’s Legal Counsel. 19 31

Item 3. APPENDIX A – Approved Products The following shall constitute a list of approved products to be utilized by TEA to manage the City’s energy commodity portfolio:  Physical Power  Physical Natural Gas  Physical Residual Fuel Oil (#2)  Physical Power Options  Environmental Products  Capacity  Financial Power  Financial Options  PJM Demand Bids and Generation Offers  PJM InSchedules  PJM Transmission Products o Financial Transmission Rights o Annual Auction Revenue Rights  PJM Tier 2 Synchronized Reserves 20 32

Item 3. APPENDIX B – Approved Counterparties and Threshold Tables This Appendix establishes approved counterparties and their Collateral thresholds. Collateral thresholds, term limitations and credit exposure limits that are subject to the following maximums based upon the lower of the S&P and Moody’s credit ratings: Credit Thresholds from Dover Extended to the Counterparty Exelon Generation Company, LLC Formatted Table Threshold S&P Moody's $ 60,000,000 AAA Aaa $ 50,000,000 A- to AA+ A3 to Aa1 $ 40,000,000 BBB+ Baa1 $ 30,000,000 BBB Baa2 $ 20,000,000 BBB- Baa3 $ - Below BBB- Below Baa3 AEP Energy Partners, Inc. Formatted Table Threshold S&P Moody's $ 10,000,000 BBB- and Above Baa3 and Above $ - Below BBB- Below Baa3 BP Energy Company Formatted Table Threshold S&P Moody's $ 60,000,000 AA- to AAA Aa3 to Aaa $ 45,000,000 A+ A1 $ 30,000,000 A A2 $ 15,000,000 BBB to A- Baa2 to A3 $ - Below BBB Below Baa2 Calpine Energy Services, L.P. Formatted Table Threshold S&P Moody's $ 25,000,000 AAA Aaa $ 15,000,000 AA- to AA+ Aa3 to Aa1 $ 10,000,000 A- to A+ A3 to A1 $ 5,000,000 BBB+ Baa1 $ 3,000,000 BBB- to BBB Baa3 to Baa2 $ - Below BBB- Below Baa3 21 33

Item 3. EDF Trading North America, LLC Formatted Table Threshold S&P Moody's $ 18,000,000 Fixed Fixed PSEG Energy Resources & Trade, LLC Threshold S&P Moody's $ 20,000,000 BBB- and Above Baa3 and Above $ - Below BBB- Below Baa3 Sequent Energy Management, L.P. Formatted Table Threshold S&P Moody's $ 5,000,000 Fixed Fixed Conectiv Formatted Table Threshold S&P Moody's Unspecified * Above BBB+ Above Baa3 $ - Below BBB- Below Baa3 * Conectiv does not have a defined credit threshold, so for planning purposes, a $10,000,000 threshold is imposed as a conservative limit Macquarie Energy, LLC Formatted Table Threshold S&P Moody's $ 25,000,000 AAA Aaa $ 20,000,000 AA- to AA+ Aa3 to Aa1 $ 15,000,000 A- to A+ A3 to A1 $ 10,000,000 BBB+ Baa1 $ 5,000,000 BBB Baa2 $ - BBB- or below Baa3 or below Morgan Stanley Capital Group Formatted Table Threshold S&P Moody's $ 25,000,000 AAA Aaa $ 20,000,000 AA- to AA+ Aa3 to Aa1 $ 15,000,000 A- to A+ A3 to A1 $ 10,000,000 BBB+ Baa1 $ 5,000,000 BBB Baa2 $ - BBB- or below Baa3 or below 22 34

Item 3. NextEra Energy Marketing, LLC Formatted Table Threshold S&P Moody's $ 30,000,000 AAA Aaa $ 25,000,000 AA- to AA+ Aa3 to Aa1 $ 20,000,000 A- to A+ A3 to A1 $ 15,000,000 BBB+ Baa1 $ 10,000,000 BBB Baa2 $ - BBB- or below Baa3 or below Deutsche Bank Formatted Table Threshold S&P Moody's $ 25,000,000 AAA Aaa $ 20,000,000 AA- to AA+ Aa3 to Aa1 $ 15,000,000 A- to A+ A3 to A1 $ 10,000,000 BBB+ Baa1 $ 5,000,000 BBB Baa2 $ - BBB- or below Baa3 or below Barclays Bank Formatted Table Threshold S&P Moody's $ 25,000,000 AAA Aaa $ 20,000,000 AA- to AA+ Aa3 to Aa1 $ 15,000,000 A- to A+ A3 to A1 $ 10,000,000 BBB+ Baa1 $ 5,000,000 BBB Baa2 $ - BBB- or below Baa3 or below Credit Thresholds from the Counterparty Extended to Dover Formatted Table AEP Energy Partners, Inc. Threshold S&P Moody's $ 10,000,000 BBB- and Above Baa3 and Above $ - Below BBB- Below Baa3 BP Energy Company Formatted Table 23 35

Item 3. Threshold S&P Moody's $ 30,000,000 AA to AAA Aa2 to Aaa $ 25,000,000 AA- Aa3 $ 20,000,000 A+ A1 $ 15,000,000 A A2 $ 5,000,000 BBB to A- Baa2 to A3 $ - Below BBB- Below Baa3 Calpine Energy Services, L.P. Threshold S&P Moody's $ 10,000,000 AA- to AAA Aa3 to Aaa $ 7,500,000 A- to A+ A3 to A1 $ 5,000,000 BBB+ Baa1 $ 3,000,000 BBB- to BBB Baa3 to Baa2 $ - Below BBB- Below Baa3 Exelon Generation Company, LLC Threshold Fitch Moody's $ 60,000,000 AAA Aaa $ 50,000,000 A- to AA+ A3 to Aa1 $ 40,000,000 BBB+ Baa1 $ 30,000,000 BBB Baa2 $ 20,000,000 BBB- Baa3 $ - Below BBB- Below Baa3 Conectiv Formatted Table Threshold Fitch Moody's Unspecified * Above BBB+ Above Baa3 $ - Below BBB- Below Baa3 *Conectiv does not have a defined credit threshold, so for planning purposes, a $10,000,000 threshold is imposed as a conservative limit PSEG Energy Resources & Trade, LLC Formatted Table Threshold S&P Moody's $ 12,000,000 * Fixed Fixed *Threshold is $12,000,000 as long as Dover maintains a Debt Service Coverage greater than 1.25% and Total Net Assets of at least $50,000,000 and Total Net Assets do not decline by more than 25% on a fiscal year end basis. Morgan Stanley Capital Group Formatted Table Threshold S&P Moody's 24 36

Item 3. $ 25,000,000 AAA Aaa $ 20,000,000 AA- to AA+ Aa3 to Aa1 $ 15,000,000 A- to A+ A3 to A1 $ 10,000,000 BBB+ Baa1 $ 5,000,000 BBB Baa2 $ - BBB- or below Baa3 or below Macquarie Energy, LLC Threshold Fitch Moody's $ 25,000,000 AAA Aaa $ 20,000,000 AA- to AA+ AA3 to Aa1 $ 15,000,000 A- to A+ A3 to A1 $ 10,000,000 BBB+ Baa1 $ 5,000,000 BBB Baa2 $ - BBB- or below Baa3 or below NextEra Energy Marketing, LLC Formatted Table Threshold Fitch Moody's $ 23,000,000 AAA Aaa $ 18,000,000 AA- to AA+ AA3 to Aa1 $ 13,000,000 A- to A+ A3 to A1 $ 8,000,000 BBB+ Baa1 $ 3,000,000 BBB Baa2 $ - BBB- or below Baa3 or below EDF Trading North America, LLC Formatted Table Threshold S&P Moody's $ 18,000,000 Fixed Fixed Deutsche Bank Formatted Table Threshold Fitch Moody's $ 25,000,000 AAA Aaa $ 20,000,000 AA- to AA+ AA3 to Aa1 $ 15,000,000 A- to A+ A3 to A1 $ 10,000,000 BBB+ Baa1 $ 5,000,000 BBB Baa2 25 37

Item 3. $ - BBB- or below Baa3 or below Barclays Bank Formatted Table Threshold Fitch Moody's $ 25,000,000 AAA Aaa $ 20,000,000 AA- to AA+ AA3 to Aa1 $ 15,000,000 A- to A+ A3 to A1 $ 10,000,000 BBB+ Baa1 $ 5,000,000 BBB Baa2 $ - BBB- or below Baa3 or below APPENDIX C – Business Risks Business Risks Topology Commodity Counterparty Process Volume Budget Regulatory Risk Risk Risk Risk Risk Risk Receivables Market Load Market Market Price Risk Risk Deadline Risk Uncertainty Uncertainty Uncertainty Performance Reporting Load Load Volume Risk Supply Risk Risk Risk Uncertainty Uncertainty M2M/Forward Generation Forecast Forecast Curve Risk Uncertainty Error Error Liquidity Risk Basis Risk Correlation Risk 26 38

Item 3. 27 39

Item 3. APPENDIX D – Glossary Back Office – That part of a trading organization which handles transaction accounting, confirmations, management reporting, and working capital management. Bilateral Transaction - Any physical or financial transaction between two counterparties, neither of whom is an Exchange or market entity (e.g. MISO). Capacity – The real power output rating of a generator or system, typically in megawatts, measured on an instantaneous basis. Commodity - A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade. Financial Bilateral Transaction – A Bilateral Transaction that is non-physical and is defined by a Source Point, Sink Point, and Delivery Point that may be any CP Nodes as specified by the Midwest ISO. Financial Forward – An agreement regarding a position in a specified commodity, a specified price, and a specified future settlement date, that does not result in physical delivery of the commodity. Rather one party in the agreement makes a payment to the other party on the basis of the commodity price at the future date. Front Office – That part of a trading organization which solicits customer business, services existing customers, executes trades and ensures the physical delivery of commodities. Hedging Transaction - A transaction designed to reduce the exposure of a specific outstanding position or portfolio; “fully hedged” equates to complete elimination of the targeted risk and “partially hedged” implies a risk reduction of less than 100%. Mark-to-Market Value – A measure of the current value of unrealized positions; includes both Open Positions and Closed Positions. Maturity – The time between the date on which a transaction is executed to the last date that power or gas will flow (in the case of physical transactions) or be settled financially (in the case of financial transactions). For products such as RECs which may be 28 40

Item 3. delivered independent of energy flow, the maturity shall be defined as the vintage period plus any additional time it may take to deliver the RECs, which may extend beyond / past the vintage period Middle Office – That part of a trading organization that measures and reports on market risks, develops risk management policies and monitors compliance with those policies, manages contract administration and credit, and keeps management and the Board informed on risk management issues. Policy – Dover’s Governing Policy for Energy Commodity Risk, as amended and approved by The Utility Committee. Portfolio – A collection of transactions. Realized Gains/(Losses) – The amount earned (or lost) from a transaction, considered to be realized once the time for performance has lapsed (e.g. delivery of power in the case of physical transactions or expiration of an option in the case of financial transactions). Term – The total duration of a contract, defined as the number of days between the beginning flow date and ending flow date, inclusive..- Unrealized Gains/ (Losses) – The amount expected to earn (lose) on a specific transaction(s); however, the time for performance has not lapsed. The total value of Unrealized Gains/ (Losses) is the Mark-to-Market value. 29 41

Item 3. APPENDIX E – Swap Transaction Representative Purpose: To ensure that the City of Dover, a Special Entity under the Dodd-Frank Financial Reform Act, selects a qualified representative (“Representative”) to provide advice and guidance when entering into swap transactions with Swap Dealers or Major Swap Participants. Definitions: Special Entity: As defined in 7 U.S.C. 6s(h)(2)(C) and further interpreted in 17 C.F.R. 23.401(c). The City of Dover is a Special Entity as defined by 17 C.F.R. 23.401(c)(2). Swap Dealer: As defined in 7 U.S.C. 1a(49) and further interpreted in 17 C.F.R. 1.3(ggg) Major Swap Participant: As defined in 7 U.S.C. 1a(33) and further interpreted in 17 C.F.R. 1.3(hhh) Representative: As defined in this policy and 17 C.F.R. 23.450 Policy: Selection: The City of Dover shall endeavor to seek and employ an individual or entity that will voluntarily act as a Representative for all energy commodity swap transactions between XXXX and any Swap Dealer or Major Swap Participant. The Representative must meet the following qualifications identified in 17 C.F.R. 23.450(b): (i) Has sufficient knowledge to evaluate the transaction and risks; (ii) Is not subject to a statutory disqualification; (iii) Is independent of the swap dealer or major swap participant; (iv) Undertakes a duty to act in the best interests of the Special Entity it represents; (v) Makes appropriate and timely disclosures to the Special Entity; (vi) Evaluates, consistent with any guidelines provided by the Special Entity, fair pricing and the appropriateness of the swap; and (vii) In the case of a Special Entity as defined in § 23.401(c)(2) or (4), is subject to restrictions on certain political contributions imposed by the Commission, the Securities and Exchange Commission, or a self-regulatory organization subject to the jurisdiction of the Commission or the Securities and Exchange Commission; provided however, that this paragraph (b)(1)(vii) of this section shall not apply if the representative is an employee of the Special Entity. The Representative and the City of Dover shall enter into a legal agreement that binds the Representative to comply with items (i) through (vii) in this policy. At no longer than any 12 month interval, the City of Dover shall review the performance of the Representative to ensure compliance with items (i) through (vii) in this policy. 30 42

Item 3. EXHIBIT B DOVER NOTIONAL TRANSACTION LIMITS EVALUATION KEVIN GALKE 9/XX/22 43

Item 3. WHAT’S CHANGED SINCE LIMITS WERE PUT IN PLACE o Significant increase in forward market prices o Retirement of McKee Run generation has made market purchases a larger piece of Dover’s generation portfolio o Generation MWh o Risk Offset o Raceway Solar uncertainty 44 11/17/2022 2

Item 3. FORWARD CURVE BACKGROUND o Forward curves reflect the market consensus for the value of a commodity in specific future delivery periods o Indicative of price to transact during these periods o Used to value future positions 45 11/17/2022 3

Item 3. FORWARD CURVE COMPARISON - NYMEX $9 $8 $7 $6 $5 $4 $3 $2 $1 $- 9.9.22 Forward Curve 8.24.15 Forward Curve 46 11/17/2022 4

Item 3. FORWARD CURVE COMPARISON – WEST HUB PEAK $180 $160 $140 $120 $100 $80 $60 $40 $20 $- 8.24.15 Forward Curve 9.9.22 Forward Curve 47 11/17/2022 5

Item 3. FORWARD CURVE COMPARISON – WEST HUB OFF PEAK $160 $140 $120 $100 $80 $60 $40 $20 $- 8.24.15 Forward Curve 9.9.22 Forward Curve 48 11/17/2022 6

Item 3. PROMPT YEAR ON PEAK PURCHASE ABILITY 500,000 450,000 400,000 350,000 300,000 MWh 250,000 200,000 150,000 100,000 50,000 - 8.24.15 Forward Curve 9.9.22 Forward Curve 49 11/17/2022 7

Item 3. ON PEAK PURCHASING MW BY YEAR – CURRENT $20M LIMIT 140 120 100 80 60 40 20 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 8.24.15 Forward Curve 9.9.22 Forward Curve 50 11/17/2022 8

Item 3. ALTERNATIVE APPROACH: SHIFT NOTIONAL LIMIT TO VOLUME o Historically risk policy used a notional value limit to constrain purchasing o Rising prices require additional limits o Falling prices leave excess purchasing ability o Shifting from notional limits to volume approach potentially right-sizes limits o Internal city limitations? 51 11/17/2022 9

Item 3. DRAFT RECOMMENDATION o Increase RMC notional limits from $20M to $40M o Retains same purchasing power as originally approved o Maintains operational flexibility 52 11/17/2022 10

Item 4. CITY OF DOVER, DELAWARE ACTION FORM PROCEEDING: Council Committee of the Whole (Safety Advisory and Transportation Committee) DEPARTMENT OF ORIGIN: City Manager’s Office SUBMITTED ON: December 6, 2022 PREPARED BY: Sharon J. Duca, P.E., Assistant City Manager REVIEWED BY: David S. Hugg, III, City Manager SUBJECT: Dover Roundabout Analysis for Governors Boulevard, Ross Street and Bradford Street TIMETABLE: Pending selection by City Council. RELATED PROJECT: n/a EXHIBITS Exhibit A – Governors Avenue/Ross Street and Bradford Street Safety Improvement Options REFERENCE: n/a EXPENDITURE REQUIRED: n/a AMOUNT BUDGETED: n/a FUNDING SOURCE (Dept./Page in CIP & Budget): n/a STAFF RECOMMENDATION: For Council to receive public input regarding the options presented and to allow for additional research into low impact traffic calming options. BACKGROUND AND ANALYSIS: The six-way intersection of Governors Boulevard, Ross Street and Bradford Street was added to the City of Dover’s 2023 Transportation Priorities listing due to several traffic accidents that have occurred as well as related safety issues. As a result of these concerns, Representative Sean Lynn has offered to fund a solution to this traffic concern through community transportation (CT) funds. In turn, the Delaware Department of Transportation (DelDOT), through a consultant, has analyzed three different roundabout/traffic circle options. The results of this analysis are provided in Exhibit A. Each option analyzed has advantages and disadvantages. Option 1 is a modern roundabout that maintains all lanes on all roads at the junction. One of the main disadvantages of this option is that it would require the total take of six (6) existing homes and properties. The project also could not be pursued with CT funds as it involves right-of-way and drainage impacts beyond the scope of the traffic calming program. Option 1a is a modified roundabout that eliminates lanes on Ross Street and Bradford Street to reduce the 53

Item 4. size of the roundabout. One of the main disadvantages of this option is that it would still impact four (4) properties which includes the total take of two (2) existing homes and properties. This project also could not be pursued with CT funds for the same reasons as that presented for Option 1. Option 2 is a mini traffic circle within the existing limits of the intersection to act as a traffic calming device. Due to the size, larger vehicles would need to utilize the fully mountable central island. This is a relatively new form of traffic control that may require an educational component to get local motorists familiar with its use. This option could be pursued with CT funds. It should be noted that the speed on Governors Boulevard was reduced earlier this year to 25 MPH from 35 MPH. A six (6) month evaluation of the impact is currently being scheduled by DelDOT. Other traffic calming options can also be reviewed by DelDOT including adding additional signage and painting the roadway, such as narrowing lanes. As a result of the above staff recommends receiving public input regarding the options presented and to allow for additional research into low impact options due to the disadvantages associated with Options 1, 1a and 2 above. Should City Council select Option 2, City staff can work with DelDOT and Representative Lynn’s office to proceed with design and ultimately installation. 54

Item 4. Governors Avenue/Ross Street and Bradford Street November 2022 Safety Improvement Options Governors Avenue/Ross Street and Bradford Street Safety Improvement Options November 2022 Option 1 – 6-Legged Roundabout – Maintain all Lanes Option 1 is a roundabout concept that maintains all lanes on Governors Avenue, Ross Street and S. Bradford Street. The size of the roundabout is necessary to accommodate all legs at this junction while maintaining entry and exit flares on all 6 legs of the junction. This option also provides pedestrian accessibility throughout the intersection and accommodates design vehicles up to a WB-50 for several (but not all) turning movements. This concept was developed primarily to show the extent of impacts that would result from constructing a modern roundabout that maintains all lanes on all roads at this junction. Advantages: • Maintains all lanes of travel on the existing six legs of the intersection. • Splitter islands provide direction (channelization) for vehicles when entering the roundabout to direct them into the circulating lane of the roundabout, while also providing pedestrian refuge. • Roundabouts act as a traffic calming device and do not give priority to any one leg of the intersection. They are also proven to improve safety as left turning movements are eliminated. • Improves sight distances on each leg of the intersection. • Offers beautification options in the center island. Disadvantages: • Requires the total take of 6 existing homes and properties adjacent to the intersection. • Overall cost for design and construction would be the highest of all 3 options. • Would require extensive drainage and stormwater management devices due to the added pavement to the intersection. • Even as shown, does not meet FHWA (NCHRP) roundabout design guidance for several approaches in terms of approach or departure radii to obtain approach/circulating/departure speed consistency. • Eliminates some parking along each leg of the intersection. • Creates conflicts with 2 existing driveways which will require modifying driveway access. • Does not qualify as a Traffic Calming project due to right-of-way and drainage impacts. City of Dover would have to work with Dover/Kent MPO for eventual inclusion into the CTP. Option 1a – 6-Legged Roundabout – Limited Access on Ross Street and S. Bradford Street Option 1a is a modification of Option 1 and eliminates lanes on Ross Street and S. Bradford Street to help reduce the size of the proposed roundabout. This option also provides pedestrian accessibility throughout the intersection and accommodates design vehicles up to an SU-40 for most movements. Advantages: • Splitter islands provide direction (channelization) for vehicles when entering the roundabout to direct them into the circulating lane of the roundabout, while also providing pedestrian refuge. 55

Item 4. Governors Avenue/Ross Street and Bradford Street November 2022 Safety Improvement Options • Roundabouts act as a traffic calming device and do not give priority to any one leg of the intersection. They are also proven to improve safety as left turning movements are eliminated. • Improves sight distances on each leg of the intersection. • Offers beautification options in the center island. • The limited access option allows for a smaller roundabout (and lower cost) compared to Option 1. • Access restrictions on Ross Street and S. Bradford Street help to reduce cut through traffic. Disadvantages: • Requires the total take of 2 existing homes and properties adjacent to the intersection and negotiation with 2 other homeowners due to minor property impacts near the roundabout. • Higher cost for design and construction compared to Option 2. • Would require extensive drainage and stormwater management devices due to the added pavement to the intersection. • Eliminates some parking along each leg of the intersection. • Creates conflicts with 2 existing driveways which will require modifying driveway access. • Eliminates through movements on 2 approaches – although on low volume roads with relatively short diversion routes. • Does not qualify as a Traffic Calming project due to right-of-way and drainage impacts. City of Dover would have to work with Dover/Kent MPO for eventual inclusion into the CTP. Option 2 – 6-Legged Mini Traffic Circle Option 2 is a 6-legged mini traffic circle located within the existing intersection limits to act as a traffic calming device through the existing intersection. This option also provides pedestrian accessibility throughout the intersection and accommodates design vehicles up to an SU-40, similar to existing conditions. Larger trucks (WB-67) can still travel straight through this intersection along Governor’s Avenue by utilizing the fully mountable central island. Advantages: • Mini Traffic Circles act as a traffic calming device and do not give priority to any one leg of the intersection. They are also proven to improve safety as left turning movements are eliminated. • Lowest cost for design and construction compared to other options. • Would require minimal drainage improvements and no stormwater management. • Does not require any right of way takings or major property impacts. • Accommodates smaller design vehicles, limiting trucks entering the neighborhoods. • Can be pursued as a Traffic Calming project. Disadvantages: • Eliminates a small amount of curbside parking along each leg of the intersection. • Not enough room to accommodate splitter islands, providing less channelization for vehicles approaching the roundabout compared to the roundabout options, and no refuge for pedestrians. • Relatively new form of traffic control (mini-traffic circle) may require an educational component to get local motorists more familiar with its use, particularly by truck drivers that will need to drive across the central island to make several turning movements. 56

Item 4. N 400 27 . 7160 MAI 50 6 NOR 2 0 NGOR 2/ 5 E 0 1 ALM .D 67 D.R 0 2 05 06716 02 8800 920 6 02 SR. TAYLOR FREDERI CK G 671 V. D.R.D11512/ 05 0 RUCE 25 27 2 B 2 RS 42/ AYE .D 95 D. R 0 750 02 6716 NA R. 50 ON 1 2 0 LEY D / 30 KEL .O 40 R D. ET BO TRE UL EV 00 DS 2 91 AR 06716 0 OF TY D 2 05 VER,CI 58 FOR DO 41/2 R.B GO D. RAD VE N.B RN OR S 0 760 6 02 AN 671 ISTE F 0 50 K 930 C 2 0 LOWS 10/ 77 6 02 ,LL 1 KOZ .D120 67 5 0 PERT ES I 2 R D. 0 18 2 PRO 0439/ AB EET MO R. D1 S STR D. ROS 0 0 670 870 6 02 R. 02 C. 671 BLE 16 5 0 N MA 0 67 S 50 AME 2 0 SO 82/ 10 EET 2 0 ZER J 4/ 30 RRI MO R.D 3 S STR FRA 3 D. ROS D.R.X 860 0 400 29 16 02 B. 716 0 N T. 67 SA 6 EA 50 LI 50 J 2 0 TRONA 9/ 91 2 0 HENS / 412 ITC 26 CU 3 BO H D.R.L D.R.Y 2 05 06716 02 6600 UL ET RNES J BEI L I LLEFEVRE TRUSTEE EV TRE R.D 7549/ D. 36 AR D DS FOR GO VE RAD RN 850 0 OR 02 K P. N.B 6 671 DERIC 50 S 2 0 E FRE 4/ Z 6 199 N 3 700 FRA R. D 28 D. 716 0 S C. 6 50 AME 2 0 ZER J 4/ 30 FRA 3 R.X D. 2 05 06716 02 8700 FRAZER JAMES C. D.R. X 34/30 0 840 6 02 NE 671 ERI 5 0 CATH 79 20 IC K 24/ S ME .D11 5 D.R 0 950 02 P. 6716 A N 50 SUS 4 2 0 ELLO 19 / ROS R.I25 D. 300 28 716 0 NIL. 6 ON 50 J 2 0 SKEE 80/ 17 OL 71 W D D.R. 2 05 06716 02 6400 VANSANT DOUGL AS A. 0 820 R. R 25/ D. 101 6 02 A. 671 NA 5 0 S DON 7 2 0 HI N 28 C 19/ HUT . .Q DR CONTRACT SECTION SCALE GOVERNORS BLVD AND ROAD NO. X TXXXXXXXXX RKK 0 30 60 90 ROSS STREET COUNTY DESIGNED BY: LMW EXISTING CONDITION SHEET NO. $D ATE$ $TI M E$ $FI LE$ FEET DOVER, DE KENT CHECKED BY: XXX XX 57

Item 4. N 400 27 . 7160 MAI 50 6 NOR 2 0 NGOR 2/ 5 E 0 1 ALM .D 67 ET D.R TRE DS BO FOR UL RAD EV AR N.B D 2 05 06716 02 8800 GO 920 0 02 . VE TAYLOR FREDERI 16 SR CK G 67 V. 5 0 RUCE 25 D.R.D11512/27 RN 2 0 RS B 42/ 2 OR AYE .D 95 D. R S 0 750 02 6716 NA R. 50 ON 1 2 0 LEY D / 30 KEL .O 40 R D. 00 2 91 6716 0 OF 0 TY 2 05 VER,CI 58 DO 41/2 D.R.B EET S STR 0 ROS 760 6 02 AN 671 ISTE F 0 50 K 930 C 2 0 LOWS 10/ 77 6 02 ,LL 1 KOZ .D120 67 5 0 PERT ES I 2 R D. 0 18 2 PRO 0439/ AB MO R. D1 D. 0 0 670 870 6 02 R. 02 C. 671 BLE 16 5 0 N MA 0 67 S 0 50 AME 2 SO 82/ 10 2 0 ZER J 4/ 30 RRI A 3 MO R.D 3 FR R.X D. D. EET S STR ROS 860 0 400 29 16 02 B. 716 0 N T. 67 SA 6 EA 50 LI 50 J 2 0 TRONA 9/ 91 2 0 HENS / 412 ITC 26 CU 3 H R.Y D.R.L D. 2 05 06716 02 6600 RNES J BEI L I LLEFEVRE TRUSTEE R.D 7549/ D. 36 0 850 6 02 K P. 671 DERIC 50 2 0 E FRE 4/199 NZ 36 700 FRA R. D 28 D. 716 0 S C. 6 50 AME 2 0 ZER J 4/ 30 FRA 3 R.X D. BO UL 2 05 06716 02 8700 EV FRAZER JAMES C. AR D.R. X 34/30 D 0 840 02 NE GO 6 671 ERI 5 0 CATH 79 20 I VE SC K ME .D11 524/ RN D.R 950 0 OR 6716 02 A N P. S 50 2 0 ELLO SUS 4 19 / ROS R.I25 D. 300 28 716 0 NIL. 6 ON 50 J 2 0 SKEE 80/ 17 OL 1 ET W D 7 D.R. TRE DS LEGEND FOR RAD 2 05 06716 02 6400 AS A. N.B VANSANT DOUGL 0 ROW LINE PROPOSED TRUCK APRON 820 R. R 25/ D. 101 6 02 A. 671 NA 5 0 S DON 7 2 0 HI N 28 C 19/ HUT . .Q DR PCC CURB PROPOSED TOPSOIL / SEEDING PEDESTRIAN CONNECTION PROPOSED DRIVEWAY PROPOSED SIDEWALK FULL DEPTH PAVING ASPHALT CONTRACT SECTION SCALE GOVERNORS BLVD AND ROAD NO. X TXXXXXXXXX RKK 0 30 60 90 ROSS STREET COUNTY DESIGNED BY: LMW CONCEPT-1 SHEET NO. $D ATE$ $TI M E$ $FI LE$ FEET DOVER, DE KENT CHECKED BY: XXX XX 58

Item 4. BO UL N EV AR D GO VE RN 27 400 . OR 60 AI S 71 M 50 6 NOR ET 2 0 NGOR 2/ 5 E 0 1 ALM .D 67 TRE D.R DS FOR RAD N.B 0 2 05 06716 02 8800 920 6 02 SR. TAYLOR FREDERI CK G 671 V. D.R.D11512/ 05 0 RUCE 25 27 2 B 2 RS 42/ AYE .D 95 D. R 0 750 02 6716 NA R. 50 ON 1 2 0 LEY D / 30 KEL .O 40 R D. 00 2 91 6716 0 OF 0 TY 2 05 VER,CI 58 DO 41/2 D.R.B EET S STR ROS 0 760 6 02 AN 671 ISTE F 0 50 K 930 C 2 0 LOWS 10/ 77 6 02 ,LL 1 KOZ .D120 67 5 0 PERT ES I 2 R D. 0 18 2 PRO 0439/ AB MO R. D1 D. 0 0 670 870 6 02 R. 02 C. 671 BLE 16 5 0 N MA 0 67 S 0 50 AME 2 SO 82/ 10 2 0 ZER J 4/ 30 RRI A 3 MO R.D 3 FR R.X D. D. EET S STR ROS 860 0 400 29 16 02 B. 716 0 N T. 67 SA 6 EA 50 LI 50 J 2 0 TRONA 9/ 91 2 0 HENS / 412 ITC 26 CU 3 H R.Y D.R.L D. 2 05 06716 02 6600 RNES J BEI L I LLEFEVRE TRUSTEE R.D 7549/ D. 36 0 850 6 02 K P. 671 DERIC 50 2 0 E FRE 4/199 NZ 36 700 FRA R. D 28 D. 716 0 S C. 6 50 AME 2 0 ZER J 4/ 30 FRA 3 R.X D. 2 05 06716 02 8700 FRAZER JAMES C. D.R. X 34/30 0 840 6 02 NE 671 ERI 5 0 CATH 79 20 I ET SC K 524/ ME .D11 TRE D.R 0 950 02 P. 716 N DS 6 A 50 SUS 4 2 0 ELLO 19 / ROS R.I25 FOR D. RAD N.B 300 28 716 0 NIL. 6 ON 50 J 2 0 SKEE 80/ 17 OL 71 W D D.R. BO UL LEGEND EV 2 05 06716 02 6400 AR VANSANT DOUGL AS A. D 0 820 ROW LINE PROPOSED TRUCK APRON GO R. R 25/ D. 101 6 02 A. 671 NA 5 0 S DON 7 VE 2 0 HI N 28 19/ RN C HUT . .Q DR PCC CURB PROPOSED TOPSOIL / SEEDING OR S PEDESTRIAN CONNECTION PROPOSED SIDEWALK FULL DEPTH PAVING ASPHALT CONTRACT SECTION SCALE GOVERNORS BLVD AND ROAD NO. X TXXXXXXXXX RKK 0 30 60 90 ROSS STREET COUNTY DESIGNED BY: LMW CONCEPT-1A SHEET NO. $D ATE$ $TI M E$ $FI LE$ FEET DOVER, DE KENT CHECKED BY: XXX XX 59

Item 4. N BO UL EV AR D 400 160 27 AI . GO 7 M NOR VE 6 50 2 0 NGOR 2/ 5 E 0 1 RN ALM .D 67 R D. OR S ET 0 920 TRE 2 05 06716 02 8800 6 02 SR. TAYLOR FREDERI CK G 671 V. 5 0 RUCE 25 DS D.R.D11512/27 2 0 B 2 RS 42/ AYE .D 95 FOR D. R 0 750 02 RAD 6716 NA R. 50 ON 1 2 0 LEY D / 30 N.B KEL .O 40 R D. 00 2 91 6716 0 OF 0 TY 2 05 VER,CI 58 DO 41/2 D.R.B 0 760 02 N 6 671 ISTE FA EET 0 50 K 2 0 LOWS 10/ 77 S STR 02 930 C L KOZ .D120 ROS 6716 ES I ,L R 05 0 PERT 2 D. 2 PRO 0439/ 18 AB MO R. D1 D. 0 0 670 870 6 02 R. 02 C. 671 BLE 16 5 0 N MA 0 67 S 0 50 AME 2 SO 82/ 10 2 0 ZER J 4/ 30 RRI A 3 MO R.D 3 FR R.X D. D. EET S STR ROS 860 0 400 29 16 02 B. 716 0 N T. 67 SA 6 EA 50 LI 50 J 2 0 TRONA 9/ 91 2 0 HENS / 412 ITC 26 CU 3 H R.Y D.R.L D. 2 05 06716 02 6600 RNES J BEI L I LLEFEVRE TRUSTEE R.D 7549/ D. 36 0 850 6 02 K P. 671 DERIC 50 2 0 E FRE 4/199 NZ 36 700 FRA R. D 28 ET 16 0 S C. D. 67 AME TRE 50 2 0 ZER J 4/ 30 FRA 3 R.X DS D. FOR 2 05 06716 02 8700 RAD FRAZER JAMES C. D.R. X 34/30 N.B 0 840 6 02 NE 671 ERI 5 0 CATH 79 20 IC K 24/ S ME .D11 5 D.R 0 950 02 P. 6716 A N 50 SUS 4 2 0 ELLO 19 / ROS R.I25 D. 300 28 716 0 NIL. 6 ON 50 J 2 0 SKEE 80/ 17 BO W OL D 71 UL D.R. EV AR D LEGEND GO 2 05 06716 02 6400 VE VANSANT DOUGL AS A. RN 0 ROW LINE PROPOSED TRUCK APRON 820 R. R 25/ D. 101 OR 6 02 A. 671 NA S 5 0 S DON 7 2 0 HI N 8 2 C 19/ HUT . .Q DR PCC CURB PROPOSED TOPSOIL / SEEDING PROPOSED RAISED CENTER PEDESTRIAN CONNECTION ISLAND PROPOSED SIDEWALK FULL DEPTH PAVING ASPHALT CONCEPT 2 CONTRACT SECTION SCALE GOVERNORS BLVD AND ROAD NO. X TXXXXXXXXX RKK 0 30 60 90 ROSS STREET COUNTY DESIGNED BY: BML URBAN MINI SHEET NO. $D ATE$ $TI M E$ $FI LE$ FEET DOVER, DE KENT CHECKED BY: XXX TRAFFIC CRICLE XX 60

Item 5. City of Dover Fiscal Year 2022 Audit Results January 10, 2023 SB & Company, LLC 61

Item 5. SBC • Audit of the June 30, 2022, financial statements • Performance of the Uniform Grant Scope of Guidance Single Audit • Available for year-round consultation Services 2 62 2

Summary of the Results Item 5. SBC ▪ Issued an unmodified opinion on the financial statements ▪ We did not discover any instances of fraud ▪ Discovered no material weaknesses in internal controls ▪ Received full cooperation from management ▪ Uniform grant guidance audit is in process 63 3

SBC’s Audit Approach Item 5. SBC 64 4

Assessment of Control Environment Item 5. SBC Area Points to Consider Our Assessment • Key executive integrity, ethics, and behavior • Control consciousness and operating style Control • Commitment to competence Environment • Board’s participation in governance and oversight • Organizational structure, responsibility, and authority • HR policies and procedures Risk • Mechanisms to anticipate, identify, and react to significant events Assessment • Processes and procedures to identify changes in GAAP, business practices, and internal control • Adequate performance reports produced from information systems • Information systems are connected with business strategy Information & • Commitment of HR and finance to develop, test, and monitor IT systems and programs Communication • Business continuity and disaster recovery for IT • Established communication channels for employees to fulfill responsibilities • Adequate communication across organization • Existence of necessary policies and procedures • Clear financial objectives with active monitoring Control • Logical segregation of duties Activities • Periodic comparisons of book-to-actual and physical count-to-books • Adequate safeguards of documents, records, and assets • Assess controls in place • Periodic evaluations of internal controls Monitoring • Implementation of improvement recommendations Not effective Suggested improvements 65 Effective 5

Evaluation of Key Processes Item 5. SBC Process Function A B C D Our Assessment • Cash Management • Investment Accounting • Investment Monitoring • Investment Valuation Treasury ✓ ✓ ✓ ✓ • Investment Policy • Debt Accounting • Reconciliation • Debt Compliance • Methodology Estimation • Information ✓ ✓ ✓ ✓ • Calculation • Accounting Principles and • General Ledger and Journal Disclosure Entry Processing Financial • Closing the Books • Verification and Review of ✓ ✓ ✓ ✓ Reporting • Report Preparation Results • Purchasing • Receiving Expenditures ✓ ✓ ✓ ✓ • Accounts Payable and Cash Disbursement A Understand the Process B What Can Go Wrong? Not effective C Walk-through D Test of Controls/Substantive Suggested improvements Effective 66 6

Evaluation of Key Processes Item 5. SBC Process Function A B C D Our Assessment • Attendance Reporting • Payroll Accounting and Processing Payroll ✓ ✓ ✓ ✓ • Payroll Disbursements • Cash Receipts • Revenue Recognition Revenue • Reconciliation ✓ ✓ ✓ ✓ • Cutoff • Physical Custody • Asset and Construction in Process Accounting Fixed Assets ✓ ✓ ✓ ✓ • Report Preparation A Understand the Process B What Can Go Wrong? Not effective C Walk-through D Test of Controls/Substantive Suggested improvements Effective 67 7

Item 5. SBC Required Communications 68 8

Required Communications Item 5. SBC 1. Auditor’s Responsibilities Under Generally Accepted Auditing Standards (GAAS) The financial statements are the responsibility of management. Our audit was designed in accordance with auditing standards generally accepted in the United States of America, and provide for reasonable, rather than absolute, assurance that the financial statements are free of material misstatement. We were engaged to perform our audit in accordance with the standards of the accounting principles generally accepted in the United States of America. 2. Significant Accounting Policies Management has the responsibility for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by management are described in the notes to the financial statements. 3. Auditor’s Judgments About the Quality of Accounting Principles We discuss our judgments about the quality, not just the acceptability, of accounting principles selected by management, the consistency of their application, and the clarity and completeness of the financial statements, which include related disclosures. We have reviewed the significant accounting policies adopted by the City and have determined that these policies are acceptable accounting policies. 69 9

Required Communications Item 5. SBC (continued) 4. Audit Adjustments We are required to inform the City’s oversight body about adjustments arising from the audit (whether recorded or not) that could in our judgment either individually or in the aggregate have a significant effect on the entity’s financial reporting process. We also are required to inform the City’s oversight body about unadjusted audit differences that were determined by management to be individually and in the aggregate, immaterial. No audit adjustments were required. 5. Fraud and Illegal Acts We are required to report to the City’s oversight body any fraud and illegal acts involving senior management and fraud and illegal acts (whether caused by senior management or other employees) that cause a material misstatement of the financial statements. Our procedures identified no instances of fraud or illegal acts. 6. Material Weaknesses in Internal Control We are required to communicate all significant deficiencies in the City’s systems of internal controls, whether or not they are also material weaknesses. There were no material weaknesses noted during the audit. 70 10

Required Communications Item 5. (continued) SBC 7. Disagreements with Management on Financial Accounting and Reporting Matters None. 8. Serious Difficulties Encountered in Performing the Audit None. 9. Major Issues Discussed with Management Prior to Continuance None. 10. Management Representations We received certain written representations from management as part of the completion of the audit. 11. Consultation with Other Accountants To our knowledge, there were no consultations with other accountants since our appointment as the City’s independent public accountants. 12. Independence As part of our client acceptance process, we go through a process to ensure we are independent of the City. We are independent of the City. 13. Non-attest Services None. 71 11

Our Responsibility Related to Fraud Item 5. SBC • Plan and perform the audit to obtain reasonable assurance that there is no material misstatement caused by error or fraud; • Comply with GAAS AU-C 240 “Consideration of Fraud in a Financial Statement Audit”; • Approach all audits with an understanding that fraud could occur in any entity, at any time, by anyone; and • Perform mandatory procedures required by GAAS and our firm policies. Examples of Procedures Performed • Discuss thoughts and ideas in areas where the financial statements might be susceptible to material misstatement due to fraud; • Understand pressures on the financial statement results; • Understand the tone and culture of the organization; • Look for unusual or unexpected transactions, relationships, or procedures; • Discussions with individuals outside of finance; • Evaluate key processes and controls; and • Consider information gathered throughout the audit. 72 12

Engagement Team Contact Info Item 5. SBC Bill Seymour, CPA Graylin Smith, CPA, CGFM Advisory Partner Engagement Partner Office: 410-584-1401 Office: 410-584-1404 Cell: 410-340-3515 Mobile: 443-220-4401 Home: 410-877-3192 Home: 410.252.1395 wseymour@sbandcompany.com gsmith@sbandcompany.com Executive Assistant Executive Assistant: Susan Teneza Kristina Ortiz 410-584-9303 Office: 410-584-9309 steneza@sbandcompany.com kortiz@sbandcompany.com Christopher Lehman, CPA, MBA Audit Partner Office: 410-584-2201 Mobile: 301-785-7408 clehman@sbandcompany.com Executive Assistant Susan Teneza 410-584-9303 steneza@sbandcompany.com 73 13

Item 5. SBC Maryland Washington, D.C. Pennsylvania Virginia South Florida 10200 Grand Central Avenue 1200 G Street, NW 1500 Market Street 6802 Paragon Place 4000 Hollywood Boulevard Suite 250 Suite 809 Suite 1200 Suite 410 Suite 555-S Owings Mills, MD 21117 Washington, DC 20005 Philadelphia, PA 19102 Richmond, VA 23230 Hollywood, FL 33021 410.584.0060 202.434.8684 215.665.5749 804.441.6290 954.843.3477 74 14

Item 5. ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2022 75

Item 5. This page intentionally left blank 76

Item 5. ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2022 Prepared by the Finance Department Lori Peddicord, Controller/Treasurer 77

Item 5. ACKNOWLEDGEMENTS THE CITY OF DOVER’S ANNUAL COMPREHENSIVE FINANCIAL REPORT WAS PREPARED BY THE FINANCE DEPARTMENT TRACEY LISIECKI FINANCIAL REPORTING & ACCOUNTING MANAGER ROBIN DICKERSON ACCOUNTANT II DEBBIE O’BRIEN ACCOUNTANT I SHARON DANIEL ACCOUNT CLERK II CINDY FLETCHER PAYROLL SPECIALIST SPECIAL APPRECIATION IS EXTENDED TO ALL PERSONNEL THROUGHOUT THE CITY FOR THEIR CONTINUED SUPPORT OF THE FINANCE DEPARTMENT. 78

CITY OF DOVER, DELAWARE Item 5. ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR 2022 TABLE OF CONTENTS PAGE INTRODUCTORY SECTION 1 Letter of Transmittal .................................................................................................................................... 3 Certificate of Achievement for Excellence in Financial Reporting ............................................................. 10 Mayor and Members of Council ................................................................................................................ 11 List of Elected Officials .............................................................................................................................. 12 List of Appointed Officials ......................................................................................................................... 13 List of Committees, Commissions, and Boards ......................................................................................... 14 Organization Chart .................................................................................................................................... 16 Vision.......................................................................................................................................................... 17 FINANCIAL SECTION 19 PART A - Report of Independent Public Accountants .......................................................................... 21 PART B - Management’s Discussion and Analysis .............................................................................. 27 PART C - Basic Financial Statements .................................................................................................. 45 Government-wide Financial Statements Statement of Net Position..................................................................................................................... 47 Statement of Activities ......................................................................................................................... 48 Fund Financial Statements Governmental Funds Balance Sheet ..................................................................................................... 49 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ......... 50 Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds ......... 51 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........................................................................... 52 Statement of Net Position – Proprietary Funds .................................................................................... 53 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ................ 54 Statement of Cash Flows – Proprietary Funds ...................................................................................... 55 Statement of Net Position – Fiduciary Funds........................................................................................ 56 i 79

CITY OF DOVER, DELAWARE Item 5. ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR 2022 TABLE OF CONTENTS PAGE FINANCIAL SECTION – CONTINUED Statement of Changes in Net Position – Fiduciary Funds ................................................................... 57 Notes to Financial Statements Index - Notes to Financial Statements ................................................................................................ 59 Notes to Financial Statements ............................................................................................................ 61 Part D - Required Supplementary Information ............................................................................... 125 General Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) ......................................................................................................... 127 Police Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios........................................................... 129 Schedule of Employer Contributions................................................................................................. 130 Schedule of Investment Returns ....................................................................................................... 130 General Employee Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios........................................................... 132 Schedule of Employer Contributions................................................................................................. 133 Schedule of Investment Returns ....................................................................................................... 133 Delaware Public Employee Retirement System – County and Municipal Police and Firefighter’s Pension Plan Schedule of the City of Dover’s Proportionate Share of the Net Pension Liability ........................... 135 Schedule of the City of Dover’s Contributions .................................................................................. 135 Other Post-Employment Benefits Trust Fund Schedule of Changes in Net OPEB Liability, Related Ratios............................................................... 136 Schedule of City’s Contributions ....................................................................................................... 137 Schedule of Investment Returns ....................................................................................................... 137 Notes to Required Supplementary Information Governmental Budgets...................................................................................................................... 138 ii 80

CITY OF DOVER, DELAWARE Item 5. ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR 2022 TABLE OF CONTENTS PAGE FINANCIAL SECTION – CONTINUED Part E - Supplementary Information................................................................................................ 139 General Fund Combining Schedules ............................................................................................. 141 Combining General Fund Balance Sheet ........................................................................................... 142 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances of the General Fund (Non-GAAP Basis) .............................................................................................................................. 143 Governmental Capital Projects Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual (Non-GAAP Basis) .............................................................................. 144 Financial Statements Special Revenue Funds ................................................................................ 145 Special Revenue Funds – Combining Balance Sheet ......................................................................... 147 Special Revenue Funds – Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................................................................................................. 148 Police Federal Grants – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual ............................................................................................................ 149 Police State Grants – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual ............................................................................................................ 150 Library Grants – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non- GAAP Basis) and Actual ..................................................................................................................... 151 Municipal Street Aid Fund – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual ................................................................................................ 152 Housing Programs – CDBG – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual ................................................................................................ 153 ARPA Funding Grant .......................................................................................................................... 154 State of Delaware Department of Transportation Grants – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual .................................................... 154 Substance Abuse Prevention Program – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual ............................................................................... 155 Electronic Red Light Safety Program – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual .................................................. 155 Lodging Tax Fund – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual ................................................................................................ 156 Realty Transfer Tax Fund – Schedule of Revenues, Expenditures and Changes in Unreserved Fund Balance – Budget (Non-GAAP Basis) and Actual ............................................................................... 156 iii 81

CITY OF DOVER, DELAWARE Item 5. ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR 2022 TABLE OF CONTENTS PAGE FINANCIAL SECTION – CONTINUED Proprietary Fund Types - Enterprise Funds ................................................................................... 157 Electric Revenue Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ........................................................................................................................................................... 159 Electric Improvement & Extension Fund – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual ............................................................................................................................... 160 Water Fund Schedule of Revenues and Expenses Budget (Non-GAAP Basis) and Actual ................ 161 Water Improvement & Extension Fund Schedule of Revenues and Expenses Budget (Non-GAAP Basis) and Actual ............................................................................................................................... 162 Wastewater Fund Schedule of Revenues and Expenses Budget (Non-GAAP Basis) and Actual ....... 163 Wastewater Improvement & Extension Fund Schedule of Revenues and Expenses Budget (Non- GAAP Basis) and Actual ..................................................................................................................... 164 Proprietary Fund Types - Internal Service Funds ........................................................................... 165 Worker’s Compensation – Schedule of Revenues and Expenses – Budget (Non-GAAP Basis) and Actual................................................................................................................................................. 166 Fiduciary Fund Types – Pension and Other Employee Benefit Trusts ............................................. 167 Police Pension, Employee Pension, and Other Post-Employment Benefit (OPEB) - Combining Statement of Net Position – Fiduciary Funds .................................................................................... 167 Statement of Changes in Net Position – Fiduciary Funds ................................................................. 168 Fiduciary Fund Types – Custodial ................................................................................................. 169 Combining Statement of Net Position – Custodial Funds ................................................................. 170 Combining Statement of Changes in Net Position – Custodial Funds ............................................... 170 STATISTICAL SECTION 171 Net Position by Component .............................................................................................................. 174 Changes in Net Position..................................................................................................................... 175 Fund Balances of Governmental Funds ............................................................................................. 177 Changes in Fund Balances of Governmental Funds .......................................................................... 178 Governmental Activities Tax Revenues by Source ........................................................................... 180 Assessed and Estimated Actual Value of Taxable Property ............................................................. 181 Property Tax Rates – All Direct and Overlapping Governments with the Capital School District ..... 182 Principal Tax Payers ........................................................................................................................... 183 iv 82

CITY OF DOVER, DELAWARE Item 5. ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR 2022 TABLE OF CONTENTS PAGE Property Tax Levies and Collections .................................................................................................. 184 STATISTICAL SECTION – CONTINUED Ratios of Outstanding Debt by Type.................................................................................................. 185 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net Bonded Debt Per Capita ........................................................................................................................................................... 186 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures ........................................................................................................................................................... 187 Computation of Direct and Overlapping Debt with the Capital School District ................................ 188 Computation of Legal Debt Margin ................................................................................................... 189 Revenue Bond Coverage – Electric Revenue Bonds .......................................................................... 190 Revenue Bond Coverage – Water Bonds........................................................................................... 191 Revenue Bond Coverage – Wastewater Bonds ................................................................................. 192 Top Ten Water and Wastewater Utility Customers .......................................................................... 193 Top Ten Electric Utility Customers .................................................................................................... 194 Demographic and Economic Statistics .............................................................................................. 195 Major Employers by Industry – Current Year and Nine Years Ago.................................................... 196 Full-time Equivalent City Government Employees by Function – Budgeted ................................... 197 Operating Indicators and Capital Assets Used in Operations ........................................................... 198 Summary of Insurance....................................................................................................................... 201 v 83

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Item 5. INTRODUCTORY SECTION LETTER OF TRANSMITTAL CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING MAYOR AND MEMBERS OF COUNCIL LIST OF ELECTED OFFICIALS LIST OF APPOINTED OFFICIALS LIST OF COMMITTEES, COMMISSIONS AND BOARDS ORGANIZATION CHART VISION 85 1

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. December 20, 2022 The Honorable Mayor, Honorable Council President, Members of the City Council and Citizens of the City of Dover Dover, Delaware 19901 Ladies and Gentlemen: I am pleased to submit the Annual Comprehensive Financial Report of the City of Dover for the fiscal year ended June 30, 2022. This report is published to comply with the provisions of Article IV, Section 46 of the City Charter. It is also intended to provide financial data to the tax and ratepayers, bondholders, trustees, banks, federal and state agencies, and the financial community at large. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The financial statements in this report have been audited by SB & Company, LLC, an independent firm of certified public accountants as required by Section 46 of the City Charter. SB & Company, LLC has provided an unmodified opinion on the City of Dover financial statements for the year ended June 30, 2022. The report of independent public accountants is located at the front of the financial section of this report. Management’s Discussion and Analysis (MD&A) provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Our MD&A can be found immediately following the report of our independent auditors. THE REPORTING ENTITY AND ITS SERVICES The City of Dover was incorporated in 1829 under a Charter granted by the General Assembly. Dover is the Capital of the State of Delaware and is in the central part of the State. It is home to the State Governor’s office, legislative offices, and is the County seat for Kent County. The City currently occupies a land area of 23.91 square miles and serves a population of approximately 39,491. Dover’s governing body is composed of a Mayor and nine Council Members, with one Council Member elected by 3 87

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. Council to serve as Council President. Two members of City Council are elected from each of the four districts; the ninth Council member of Council and the Mayor are elected at-large. The Council is responsible for all matters of policy and is the authority for levying taxes, securing revenues, authorizing expenditures of City funds and incurring City debts. The City of Dover operates under a Council – Manager form of government. The City provides a full range of services as mandated by the Charter or adopted by the City Council. They include police protection, street, sanitation and stormwater maintenance, recreation, library, community development, economic development, public improvements, planning and zoning, safety inspections, electric power generation and distribution, water and wastewater services, legislative services, and general administration. Within the City is a volunteer fire company that is autonomous. Under established criteria, the operations of the Robbins Hose Fire Company are not a part of this report. However, the City provides financing for dispatching, personnel costs, most of the building and equipment maintenance, supplies, and contractual services. The City also provides funding to Robbins Hose for payments on fire engine no. 5 and fire engine Squad no. 1. These payments are grouped under the Fire Department and are included in the General Fund. The Fire Chief is elected by the volunteer members of the Fire Company. The City Council traditionally adopts the election and officially appoints the Fire Chief for a one-year term. Therefore, the Fire Department is included in the City organization chart. The Capital School District does not meet the established criteria for inclusion in the reporting entity and, accordingly, is excluded from this report. The City Council shall, on or before the second Monday of June in each year, adopt a budget for the succeeding fiscal year. This annual budget serves as the foundation for the City of Dover’s financial planning and control. The budget is prepared by fund and department. With approval of the City Manager and Controller/Treasurer, Department Heads may transfer resources within or between departments, except for salaries/fringe benefits and capital project budgets. Transfers between funds and transfers of capital project budgets, however, need special approval from the City Council. ECONOMIC CONDITION AND FUTURE GROWTH Dover continues to be the dominant center of population, employment, commerce, education, and culture in Central Delaware. Economic growth continues in all sectors with construction and permit activity occurring during the year, showing modest recovery from the effects of a nation-wide pandemic. Population and employment growth remain steady, but consumer spending has been reduced and some retail market softness could continue to impact utility and other revenues. Growth in the health care and commercial/retail sectors is especially strong, with significant new projects occurring throughout the City. New manufacturing businesses are creating significant employment opportunities and adding to the City and County economies. Revitalization of the historic Downtown commercial core continues somewhat slowly, but increasingly successful projects to include the older nearby residential neighborhoods is ongoing. 4 88

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. There were 2,048 building permits of all types issued in FY22, up from the prior year. The City issued 3,725 business licenses, slightly up from the previous year, reflecting a continued recovery of economic conditions. A year-to-year comparison is not necessarily indicative of the health of Dover’s economy due to the timing of activity and the variability of general economic factors. Growth and development trends during fiscal year 2022 are discussed below. Population Growth The decennial census was conducted in 2020 and set Dover’s April 1, 2020 population at 39,403 (an increase of about 9.3% since 2010). Dover’s population is projected to grow to 41,032 by 2030, with a sustained growth rate of about 5% during each of the next ten-year periods. Statistically, Dover’s population is younger than that of the County or the State, with a slightly lower proportion of population of senior citizens as well. Working-age adults (23-64) are projected to remain stable as a percentage of the City’s population, making up slightly less than half of the City’s population through 2030. Residential Development A renewed interest in the build-out of residential subdivisions occurred in FY22 for the City, with over eighty-three (83) permits issued for a mix of one-family detached dwellings, duplexes, and townhomes. There was residential construction activity in Eden Hill Farm TND, Patriot Village, Oak Shadows, Nottingham Meadows, and Lexington Glen. A series of permits for one-family dwelling infill projects were also issued throughout the year including within the area of the Downtown Development District and other scattered lots citywide. A number of manufactured home placements also occurred on existing lots in Dover East Estates. Approximately thirty (30) new dwelling units were completed and received Certificates of Occupancy by year’s end. FY22 also saw continued activity with Fence, Shed, and Deck Permits as people made improvements at their residences. Construction activity for multi-family units only included the completion in December 2021 of the reconstruction of the Baytree Apartment building (previously destroyed by fire in April 2020). Downtown Dover Redevelopment Revitalization of the historic Downtown core is continuing in both commercial and residential sectors, with potential new businesses locating in existing spaces, primarily along Loockerman Street. Through the efforts of groups like National Council on Agricultural Life and Labor (NCALL) and Habitat for Humanity, numerous deteriorated and blighted residential properties have been demolished and are being replaced by new owner-occupied dwellings, transforming entire block-fronts adjacent to the commercial core. Over the course of FY 22, the City authorized $16,642 in Permit Fee Waivers for 26 properties for the purpose of new housing or business. This includes seventeen new homes which have been built or are in the process of being built within the Downtown Development District. Addresses include 15, 35, and 39 North New Street; 2 and 147 South New Street; 14, 20, 60, 67, 101 and 103 South Queen Street; 23 and 25 South Governors Avenue; 217 North Kirkwood Street; 49 South Kirkwood Street and 534 Fulton Street. Retail/Commercial Development 5 89

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. This sector continues to show significant growth with new and expanded locations along the major highway corridors and throughout the City. Renovations were completed for numerous commercial projects, several of which include the Sugar Factory Restaurant at Baileys, Bob’s Discount Furniture on North Dupont Highway, Rise Physical Therapy in the Gateway West Shopping Center, the FedEx facility on Starlifter Avenue, the Macy’s fulfillment center at the Dover Mall and Wing Stop on North Dupont Highway. The new facility for the Delaware Solid Waste Authority is currently under construction. An office for Delaware State Police/Homeland Security, and other commercial buildings and renovations were also completed in the Bay Road area. Manufacturing, Health Care, Institutional and Other Sectors Development Dover’s economy is well balanced across a range of sectors including manufacturing, health care, government and military, education, and industrial categories. Manufacturing showed strong growth during FY22, with both small and large firms such as Shore Industries and Avalon, and Delmarva Corrugated Packaging (a 450,000 square foot+ state of the art new manufacturer of corrugated paper packaging) making Dover home. In education, Delaware State University has numerous renovation projects underway on both their main and downtown campus. The Capital School District began construction of two middle schools and completed renovations of William Henry school, damaged a year earlier by a tornado. Two large governmental projects are in development, and one completed: site planning for a future Family Court facility is underway; and construction of a new, relocated U.S. Post Office for Dover has been completed. Both locations are within the downtown area. The other governmental project is the completion of the garage at the Delaware Department of Transportation Central District Facility. Summary Fiscal Year 2022 saw a continuation of strong growth in the state capital. Dover remains the geographic and economic center of the County, and is well posed for future growth, development, and reinvestment. LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES The City Council continues its focus and commitment to improving the quality and reliability of our City assets and infrastructure to continue to provide safe and reliable municipal services to the citizens of Dover. The City has $1.9 million in street paving and replacement of sidewalk projects in accordance with its street, concrete and alley funding. The parks and recreation department has improvements and construction underway at numerous parks within the City, totaling $0.9 million. The police department have asset additions totaling $0.5 million to include the cooling tower/HVAC related project, tile floor replacement as well as upgrades to the existing camara system, power backup, digital recording system and software/computer upgrades for an online Ticketrak system. Total vehicle and equipment purchases for the General fund totaled approximately $1.5 million. The electric utility had fixed asset additions totaling $7.4 million in fiscal year 2022. Many projects involved our Electric Engineering team as well as our Transmission and Distribution crews. The installation of transformers, conductors, and metering work of approximately $2.7 million completed in the areas known as Towne Point/White Oak distribution, Delmarva Corrugated Packaging to include backup service, Verona Woods, Patriot Village, Townsend Boulevard, College Road and several additional smaller projects. The City completed improvements to the VanSant Plant to include Exciter replacement and Turbine Casing work of approximately $1.1 million. Another phase of the LED Lighting conversion project was placed into service totaling $0.9 million. Additionally, the City also 6 90

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. had a roofing project completed at Weyandt Hall on Reed Street and facility improvements at the Electric Utility Admin location to include carpet/tile, windows paint and ceiling tiles and replacement of lighting with LED units and HVAC system. These and some other smaller building improvement projects totaling approximately $0.7 million. The water utility had capital improvements totaling $1.8 million. This total included $0.8 to include water storage tank inspection and improvements, and wellhead redevelopment improvements in an effort to maintain operations and/or increase or maintain the yield of each well. The City also had $0.6 million in water quality improvement projects in the areas of West Street and Ross Street. The water quality improvement projects include either replacement and/or relining of existing unlined cast iron pipes. Additionally, there was $0.4 million in equipment purchases. The wastewater utility had capital improvements totaling $1.8 million. Approximately $1.6 million of this total included pumpstation upgrades to the following pumpstations: Puncheon Run, and Rodney Village. The City also had smaller projects begin in the area(s) of Persimmon Apartments and Heatherfield and undertook manhole replacement work on Stoney Drive. In addition to capital improvements, there was $0.1 million in equipment purchases. The City maintains a five-year Capital Investment Plan which serves as its planning and budgeting tool to program upgrades and replacements to its equipment, facilities, and infrastructure. As part of this process, operating expenses are identified, and funding sources are determined. Managers are required to rank capital expenditures by criticality, based on the impacts on customer services and revenue losses. The fiscal year 2022/2023 Capital Investment Plan totaled $23.3 million to include numerous vehicle, equipment, and infrastructure and utility improvement projects. The Capital Investment Plan is presented to City Council each year during the budget workshops, and the final plan is approved by City Council along with the annual budget. In fiscal year 2023, the General Fund capital improvements budget is $6.3 million. The Public Works-Stormwater department has an approved budget of $2.1 million for miscellaneous storm sewer, dam, and basin improvements to include Persimmon Park Place, and Mirror Lake Drainage Basin improvements as well as replacement of Leaf Vac equipment. The Parks and Recreation department has earmarked funding of $1.0 million for Park Improvements at the Dover Park Building to include an addition of a Splash Pad and there is also funding of $0.7 million for Schutte Park Skate Park. The Parks and Recreation project budgets include general funds, Parkland Reserve funds as well as State Grant funding. The Public Works-Streets, Sanitation, and Grounds divisions have numerous equipment and/or vehicle replacements totaling approximately $0.8 million. The Police department has funding available for the officer body worn cameras, tasers and in-car camaras totaling $0.2 million. There are smaller appropriated amounts for each of the following departments of the City to include: Information Technologies, Code Enforcement, Facilities, Procurement and Inventory as well as funding for replacement fire equipment for the Robbins Hose Company. The City received funding from the American Rescue Plan Act (ARPA) of 2021 the first tranche of which totaled $4.8 million, and the City has earmarked thus far for investment in streets, water, and sewer infrastructure projects. A few of the projects are identified as follows: $2.2 million in a future well installation, $1.3 million in Water Quality Improvement projects to include N. State Street and West Street East Alley. Expenditures in association of projects funded with the ARPA funding should be spread over the qualifying period through December 2024. 7 91

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. The Water Fund budget includes capital improvements of $0.9 million. Of the projects identified to be completed are as follows: Wellhead Redevelopment, SCADA equipment upgrades and several smaller identified projects such as Water Tank and Water Main upgrades. The total Wastewater Fund capital improvements budget is $1.0 million and will be used for inflow and infiltration removal, various pump station replacement/improvements and miscellaneous emergency repairs. The Electric Fund is projecting $7.4 million in capital improvements for FY23. The new development budget totals $1.4 million. The McKee Run Power plant decommissioning project continues and will span several years of which the FY23 budget includes $4.0 million this as the project has slowly been progressing through DNREC environmental sampling and testing requirements after which the plant decommissioning will be planned and initiated. The electric administration division has projects totaling $1.6 million to include the REED street HVAC Overhaul and the renovation of the Electric Admin rear log renovation. The electric engineering division has an array of capital improvement projects totaling $0.7 million of this proposed amount there are software and equipment upgrades for such things as SCADA Hardware Replacement, Small Cell Wireless Improvements and ArcFM Migration to Electric Utility Network. FINANCIAL POLICIES AND FINANCIAL PLANNING Unassigned fund balances in the General Fund of 25.3% exceeded the policy guidelines of a minimum of 8% and maximum of 12% of current year operating revenues as approved by City Council in the City of Dover financial policies. This overage was attributed to higher than anticipated Transfer Tax receipts as well as lower than budgeted expenditures along all functions of the government due to attrition and vacancies, and as a result, the fiscal year 2023 budget will be adjusted to address the overage. The water and wastewater utility guidelines are to maintain a minimum budget balance of at least 8% and no greater than 17% (two months) of the current year operating revenues. The current budget balances as of June 30, 2022, for the utilities are water at 29.4% of the actual water revenues and wastewater at 29.8% of the actual wastewater revenues. Both budget balances are outside of the guidelines and will be addressed in the fiscal year 2023 budget. The electric utility is to maintain a minimum budget balance of at least 12% (45 days) of the current year operating revenues, less the Distribution of Earnings – PCA Credit. If the balances fall below the established percentages, the City Manager is required to submit budgets to bring the balances up to minimum within three years. The electric utility ended the year with a budget balance greater than the 12%, at 26.6%. This was attributed to higher than projected power supply and generation cost offset by lower than anticipated divisional expense and debt service expense. The City policies also require non-recurring revenues to be set aside for capital improvements as designated by City Council (reserve accounts) and a $700,000 contingency reserve in the General Fund, $250,000 each for the Water and Wastewater Fund contingency reserves and $750,000 contingency in the Electric Revenue Fund to address unforeseeable natural disasters and insurance losses. All major funds meet the contingency reserve requirements. 8 92

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. MAYOR AND MEMBERS OF COUNCIL Julia M. Pillsbury, William F. Hare, 2nd Fred A. Neil, 3rd David L. Anderson, 4th 1st District District District District Roy Sudler, Jr., 4th Gerald L. Rocha, Sr., Ralph L. Taylor, Jr., Tricia K. Arndt, District, 1st District 2nd District 3rd District Council President Andre M. Boggerty, Robin R. Christiansen, At-Large Mayor 11 95

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. LIST OF ELECTED OFFICIALS CITY OF DOVER, DELAWARE List of Elected Officials June 30, 2022 Length of Term Service Expires Mayor Robin R. Christiansen 8 Years May 2023 City Council At-Large Andre M. Boggerty 1 Year May 2025 First District Julia M. Pillsbury 9 months May 2023 Gerald L. Rocha, Sr. 1 Year May 2025 Second District William F. Hare 11 Years May 2025 Ralph L. Taylor, Jr. 3 Years May 2023 Third District Tricia K. Arndt 1 Year May 2023 Fred A. Neil 7 Years May 2025 Fourth District David L. Anderson 11 Years May 2025 * Roy Sudler, Jr. 7 Years May 2023 * Council President Note: length of service does not reflect previous, non-consecutive service, or interim appointment prior to permanent appointment 12 96

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. LIST OF APPOINTED OFFICIALS CITY OF DOVER, DELAWARE List of Appointed Officials June 30, 2022 Length of Length of Time in Time with Position the City City Clerk/Assistant Treasurer – Andria L. Bennett 8 Months 8 Months City Manager – David S. Hugg, III 9 Months 4 Years City Solicitor – Nicholas H. Rodriquez 54 Years 54 Years Deputy City Solicitor – Gary E. Junge 2 Years 2 Years Council President – Roy Sudler, Jr. 1 Year 7 Years City Building Inspector – Mary Ellen Gray 1 Month 1 Month City Planner – Mary Ellen Gray 1 Month 1 Month Controller/Treasurer – Lori Peddicord 4 Years 7 Years Fire Chief – David Carey 1 Year 2 Year Fire Marshal – Jason A. Osika 6 Years 20 Years Police Chief – Thomas Johnson 2 Years 2 Years Note: length of service does not reflect previous, non-consecutive service, or interim appointment prior to permanent appointment 13 97

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. List of Committees, Commissions, and Boards Phillip McGinnis Awards Committee Sandra Taylor Peggy Angel Rufus Mincey, Interim Executive Director/Secretary Ronald R. Gough Georgia Van Sant Dover Public Library Advisory Commission Council Liaison Member, Vacancy Board of Adjustment Zachery C. Carter K.C. Sheth, Chair Jill B. Street Arthur G. Ericson, Vice Chair Vacancy William A. Hufnal Vacancy James N. Keller Vacancy Richard D. Senato Dover/Kent County MPO Council Board of Assessment Appeals Mayor Robin R. Christiansen William Garfinkel, Accounting, Chair Thomas Burns, R. E. Brokerage of Sales Downtown Dover Partnership Board of Directors John G. Davis, Jr., Undesignated City Manager, David S. Hugg III Douglas Doyle, R. E. Brokerage of Sales City Planner, Mary Ellen Gray Vacancy, Accounting Mayor Robin R. Christiansen Vacancy, Property Appraisal/Assessments Councilman Ralph L. Taylor, Jr. Councilman Fred A. Neil Construction and Property Maintenance Code Board of Appeals Economic Development Committee Councilman David L. Anderson, Chair Mayor Robin R. Christiansen, Chair Councilman Fred A. Neil Councilman Ralph L. Taylor, Jr. Councilman Gerald L. Rocha, Sr. Councilman Fred A. Neil Matthew D. Campana, Rep. of Homeowners Kim I. Adams Charles Martin, Rep. of Local R. E. Industry Assoc. Clayton E. Hammond II City Manager, David S. Hugg III Dover Fourth of July Celebration Committee City Planner, Mary Ellen Gray Mayor Robin R. Christiansen, Chair Diane Laird Andrea Maucher, President/Vice Chair Brett Scott, Vice-President Election Board Lori Peddicord, Treasurer/Secretary At Large: Heather D. Ennis Carolyn D. Courtney First District: Alfreda F. Dean Vacancy Second District: Cherritta L. Matthews Vacancy Third District: James W. Brockton Vacancy Fourth District: M. Milford Caldwell, Jr. Vacancy Andria L. Bennett, City Clerk (Liaison Member) Vacancy Ethics Commission Dover Housing Authority Jonathon Sadlowski Todd M. Stonesifer Erika D. Crawford Enrico LePore Brandy M. Walker Robert F. Merritt Lisa M. Enright Audrey Daniels Nancy H. Wagner 14 98

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. List of Committees, Commissions, and Boards - Continued Michael Tholstrup General Employee Pension Plan Board of Trustees Michael W. Lewis Councilman David L. Anderson Councilman Ralph L. Taylor, Jr. Planning Commission City Manager, David S. Hugg III At-Large: Dr. Bobby Jones Controller/Treasurer, Lori Peddicord First District: Kathleen Welsh Robert Gedney First District: Holly L. Malone Ronald Coburn, Jr. Second District: Robert Hartman Carolyn Courtney Second District: Andrea Maucher, Chair Third District: Joan E. Denney Historic District Commission Third District: Chris Cooper Vacancy (Chair) Business Rep./Resident Fourth District: John H. Baldwin, Sr. Ann Baker Horsey, (Vice-Chair) Professional/Resident Fourth District: Kenneth Roach Eric S. Czerwinski, Professional Mary Terry Mason, Resident Police Pension Plan - Retirement Committee Jonathan N.H. Street, Professional Councilman David L. Anderson Councilman Ralph L. Taylor, Jr. Human Relations Commission City Manager, David S. Hugg III At-Large: Vacancy Police Chief Thomas Johnson First District: Paul Fleming (Ret. Lt.) Timothy Mullaney, Sr., Chair First District: Joseph C. Simmons (Ret. Captain) Larry Gray Second District: Vacancy (Ret. Sgt.) Steve Rogers Second District: Vacancy Third District: Alan Gaddis, Chair Public Advisory Committee of the Dover/Kent County Third District: Wanda Mullen MPO Fourth District: Rita Mishoe Paige Dr. Shanita A. Powell Fourth District: Vacancy Jonathan Contant Karen McGloughlin Kent County Tourism Board of Directors Albert W. Holmes, Jr. (At-Large Alternate) Councilman Fred A. Neil Safety Advisory and Transportation Committee Kent Economic Partnership Board of Directors Councilman Ralph L. Taylor, Jr., Chair Mayor Robin R. Christiansen Chanda P. Jackson - Short Legislative, Finance, and Administration Committee James E. Hosfelt, Jr. Councilman David L. Anderson, Chair Silver Lake Commission Jonathan D. Contant Vacancy, Chair Daniel T. Shevock Kathleen Marie Doyle Other Post-Employment Benefits (OPEB) Board John C. DeMarie Welton N. Satchell Councilman David L. Anderson Marie E. Kozel Councilman Ralph L. Taylor, Jr. Michael W. Lewis City Manager, David S. Hugg III Joan M. Winters Controller/Treasurer, Lori Peddicord Human Resources Director, Kimberly Hawkins Utility Committee Parks, Recreation and Community Enhancement Councilman Gerald L. Rocha, Sr., Chair Dana Shelton Councilman Andre M. Boggerty, Chair LaVaughn T. McCutcheon 15 99

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. VISION The City of Dover is a place where people want to live! Through the team effort of its elected officials, employees, and citizens, Dover is a clean and safe community, with a future of balanced growth and opportunity where all citizens are heard, enjoy a high quality of life, and diversity is valued. 17 101

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Introductory Section Item 5. City Hall 18 102

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Item 5. FINANCIAL SECTION THIS SECTION INCLUDES THE FOLLOWING: PART A – REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS PART B – MANAGEMENT’S DISCUSSION AND ANALYSIS PART C – BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Fund Financial Statements Notes to Financial Statements PART D – REQUIRED SUPPLEMENTARY INFORMATION PART E – SUPPLEMENTARY INFORMATION Combined Fund Statements Budgetary Schedules 19 103

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section Item 5. PART A REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 21 105

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Item 5. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON THE AUDIT OF THE FINANCIAL STATEMENTS The Honorable Mayor and Members of the City Council of Dover, Delaware Opinion We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Dover, Delaware (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a year after the financial statements are available for issue, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. 10200 Grand Central Avenue • Suite 250 • Owings Mills • Maryland 21117 • P 410-584-0060 • F 410-584-0061 107

Item 5. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal controls. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal controls– related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the General fund-schedule of revenues, expenditures, and changes in fund balance-budget and actual; the schedules of changes in net pension liability, related ratios for the police pension plan and the general employee pension plan; the schedule of employer contributions for the police pension plan and the general employee pension plan, the schedule of the City’s proportionate share of the net pension liability for the county and municipal police and firefighters pension plan; the schedule of the City’s contributions for the county and municipal police and firefighters pension plan; and the schedule of changes in net OPEB liability, related ratios for the OPEB plan, schedule of City contributions for the OPEB plan, and the schedule of investment returns for the police pension plan, general employee pension plan, and OPEB plan, and the notes to required supplementary information, as listed in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary 108

Item 5. information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements (nonmajor governmental funds, internal service funds, and fiduciary funds) and budgetary comparison schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit and the procedures described above, the combining and individual fund financial statements and supplementary schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual comprehensive financial report. The other information comprises the introductory and statistical sections but does not include the financial statements and our independent public accountant’s report thereon. Our opinion on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Owings Mills, Maryland December 20, 2022 109

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section Item 5. PART B MANAGEMENT’S DISCUSSION AND ANALYSIS 111 27

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. The City of Dover Management’s Discussion and Analysis For the Year Ended June 30, 2022 The following is a discussion and analysis of the City of Dover’s (the City’s) financial activities for the fiscal year ended June 30, 2022. Readers are encouraged to consider the information presented here in conjunction with additional information provided in our letter of transmittal, which can be found on pages 3-9 of this report, and the City’s financial statements which follow this section. Financial Highlights The City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $267.6 million (net position). Included in this amount is a positive $38.0 million balance in “unrestricted net position”. The total Net Position represents the funds available to meet the City’s ongoing obligations to citizens and creditors. Governmental activities reported a positive unrestricted net position of $6.8 million and the business-type activities; Water, Wastewater and Electric funds, reported a positive $31.2 million unrestricted net position. The difference between the unrestricted amounts and the total net position is $229.6 million, of which $75.1 million is restricted primarily for debt and capital construction purposes, and $154.5 million is net investment in capital assets. Total assets increased for the governmental activities by $9.3 million and the business-type activities total assets decreased in the amount of $5.1 million. Deferred Outflows for both the governmental activities and business-type activities increased by $6.2 million and $2.7 million respectively. Deferred Inflows increased for the governmental activities by $0.2 million, and business-type activities decreased by $1.0 million. Liabilities decreased for the governmental activities by $3.3 million, and for the business-type activities, the liabilities increased by $0.7 million. • For governmental activities, the City reported: a decrease of $0.8 million invested in capital assets, an increase in restricted net assets of $4.3 million, and an increase of $15.1 million in unrestricted net position. As a result of its operations, the City recognized a positive change in net position of governmental activities of $18.6 million. The current year’s change in net position is $6.4 million higher than the previous years’ change in net position and is primarily due to increases in program revenues totaling $6.3 million including an increase in property taxes of $0.5 million, the expenses increased across all functions of government except for the community and economic development function. The increase in indirect expense allocation offset the increases in expense, resulting in an overall increase in expense of $0.8 million. There was an increase in transfers of $1.0 million, rounding out the increase in net position of $18.6 million. • For business-type activities, the City reported: an increase of $0.7 million invested in capital assets, a decrease in restricted net position of $3.7 million and an increase of $0.9 million in unrestricted net position. As a result of its operations, the City recognized a negative change in net position of business-type activities of $2.1 million, which is a decrease from last years’ positive change of $9.3 million driven primarily by reductions of total revenues of $1.7 million which includes a net increase of $1.7 million for water, wastewater, and electric charges for services. Other contributing factors were a significant loss on investments totaling $3.5 million. Total 113 29

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. expenses increased in the amount of $8.7 million substantially driven by an increase in electric expenses of $8.1 million, as well as an increase in indirect expense allocations of $0.6 million rounding out the decrease in net position of $2.1 million, which is $11.4 million less than the prior years’ net increase. Overview of the Financial Statements This discussion and analysis section is intended to serve as an introduction to the City’s Annual Comprehensive Financial Report (ACFR). The ACFR consists primarily of three required components: 1) management’s discussion and analysis (this section), 2) the basic financial statements; and 3) required supplementary information. The ACFR also includes optional supplementary information that provides summary and detail level information, and a statistical section. The basic financial statements are presented in two categories that present different views of the City’s financial condition: • The two government-wide financial statements (pages 47-48) provide both long-term and short-term information about the City’s overall financial position and operations. • The remaining (pages 49-57) fund financial statements focus on specific activities of City government, reporting the City’s operations in more detail than the government-wide statements. The City financial statements can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. - The Governmental fund statements (pages 49-52) tell how general government services, like community services, planning, public safety, and public works, were financed in the short term, as well as what remains for future spending. - Proprietary fund statements (pages 53-55) offer short and long-term financial information about the activities the government operates like a business, which for the City of Dover are the Electric, Water & Wastewater Funds. - The Fiduciary fund statements (pages 56-57) provide information about the financial relationships in which the City acts solely as a trustee or custodian for the benefit of others, to whom the resources belong. The City is the trustee, or fiduciary, for its Employee and Police Pension plans and Other Post-Employment Benefits plan and acts in a custodial capacity for the Fourth of July Celebration Committee and the Dover Days Celebration Fund, none of which are component units of the City. All the City’s fiduciary activities are reported in separate Statements of Fiduciary Net Position and Changes in Fiduciary Net Position. These activities are excluded from the City’s other financial statements because the City may not use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. The financial statements also include notes (pages 61-123) that explain some of the information in them and provide more detailed data. The statements are followed by a section of required supplementary information (pages 127-138) that further explains and supports the information in the financial 114 30

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. statements. Other supplementary information includes details on non-major funds and other information that can be found on pages 141 through 170. The following table summarizes the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and content of each of the statements: Major Features of City’s Government-wide and Fund Financial Statements Government-wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Scope Entire City The activities of the Activities the City Instances in which government City that are not operates like private the City is the (except fiduciary proprietary or businesses, such as trustee or funds) fiduciary, such as electric, water and custodian for public safety and wastewater funds someone else’s public works resources Required financial • Statement of • Balance sheet • Statement of • Statement of statements net position • Statement of net position fiduciary net • Statement of revenues, • Statement of position activities expenditures, revenues, • Statement of and changes in expenses, and changes in fund balances changes in net fiduciary net position position • Statement of cash flows Accounting basis Accrual Modified accrual Accrual accounting Accrual accounting and measurement accounting and accounting and and economic and economic focus economic current financial resources focus resources focus resources focus resources focus 115 31

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. Continued Government-wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Type of All assets, deferred Generally, assets and All assets, deferred All assets and asset/deferred outflows of deferred outflows of outflows of liabilities, both outflows of resources, resources expected to resources, liabilities, short-term and resources & liabilities, and be used up and and deferred inflows long-term liability/ deferred inflows of liabilities and deferred of resources both deferred inflows of resources both inflows of resources financial and capital, resources financial and that come due or and short-term and information capital, and short- available during the long-term term and long- year or soon term thereafter, no capital assets, or long-term liabilities included Type of All revenues and Revenues for which All revenues and All revenues and inflow/outflow expenses during cash is received expenses during the expenses during information the year, during or soon after year, regardless of the year, regardless regardless of when the end of the year; when cash is of when cash is cash is received or expenditures when received or paid received or paid paid goods or services have been received and payment is due during the year or soon thereafter Government-wide Statements The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all the City of Dover’s assets, liabilities, and deferred inflows and outflows of resources with the difference reported as net position. Net position is one way to measure the City’s financial health or position. Over time, increases or decreases in the City’s net position is an indicator of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the City, one needs to consider additional non-financial factors such as changes in the City’s property tax base and the condition of the City’s physical assets and infrastructure. The government-wide financial statements of the City are divided into two categories: • Governmental activities—Most of the City’s basic services are included here, such as general government, public safety, planning and code enforcement, public works, library and recreation, community and economic development, central services, and financial administration. Property taxes, business licenses, permits, sanitation fees, fines, utility transfers, and state and federal grants finance most of these activities. • Business-type activities—The City charges fees to customers to help it cover the costs of certain services it provides. The City’s electric, water, and wastewater services are included here. 116 32

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. Fund Financial Statements The fund financial statements provide more detailed information about the City’s most significant funds— not the City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of funding and spending for specific purposes. Some funds are required by State law and by covenants. The City Council may also establish other funds to control and manage spending for other purposes. The City has three kinds of funds: • Governmental Funds - Most of the City’s basic services are included in governmental funds, which focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out, and (2) the balances left at year end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps one determine whether there are more or fewer financial resources that can be spent soon to finance the City’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information on a separate schedule, which explains the relationship (or differences) between them. - Governmental Fund Balance classifications are reported to the extent to which they are constrained as promulgated by GAAP. - The City’s General Fund is the only governmental fund considered to be a major fund under the requirements of GAAP. • Proprietary Funds – Services for which the City charges customers a fee, are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long and short-term financial information. - The City’s enterprise funds (one type of proprietary fund) are the same as its business-type activities, but provide more detail and additional information, such as cash flows. - The City’s Electric, Water, and Wastewater enterprise funds are considered major funds under the requirements of GAAP. • Fiduciary Funds – The City is responsible for certain assets which are held for the benefit of parties outside the government. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All the City’s fiduciary activities are reported separately in a statement of fiduciary net position and a statement of changes in fiduciary net position. These activities are excluded from the City’s government-wide financial statements because the City cannot use these assets to finance its operations. 117 33

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. Financial Analysis of the City as a Whole The City produces government-wide financial statements using the full accrual basis of accounting and economic resource management focus. As year-to-year financial information is accumulated on a consistent basis, changes in net assets may be observed and used to discuss the changing financial position of the City as a whole. The Net Position of the City of Dover as of June 30, 2021 and 2022 are presented below (in millions of dollars): Governmental Business-Type Activities Activities Total 2021 2022 2021 2022 2021 2022 Assets Non-Capital Assets $ 25.0 $ 35.5 $ 141.1 $ 137.0 $ 166.1 $ 172.5 Capital Assets 59.5 58.3 130.9 129.9 190.4 188.2 Total Assets 84.5 93.8 272.0 266.9 356.5 360.7 Deferred Outflow of Resources 5.4 11.6 0.5 3.2 5.9 14.8 Liabilities Current Liabilities 4.0 3.8 12.7 10.8 16.7 14.6 Non-Current Liabilities 19.3 16.2 46.4 49.0 65.7 65.2 Total Liabilities 23.3 20.0 59.1 59.8 82.4 79.8 Deferred Inflow of Resources 21.5 21.7 7.4 6.4 28.9 28.1 Net Position Net investment in Capital Assets 53.0 52.2 101.6 102.3 154.6 154.5 Restricted 0.4 4.7 74.1 70.4 74.5 75.1 Unrestricted (8.3) 6.8 30.3 31.2 22.0 38.0 Total Net Position $ 45.1 $ 63.7 $ 206.0 $ 203.9 $ 251.1 $ 267.6 118 34

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. The Changes in Net Position for the City of Dover for the years ended June 30, 2021 and 2022 are presented as follows (in millions of dollars): Governmental Business-Type Activities Activities Total 2021 2022 2021 2022 2021 2022 Revenues: Program Revenues Charges for Services $ 9.7 $ 11.3 $ - $ - $ 9.7 $ 11.3 Water/Wastewater Charges for Services - - 16.2 16.9 16.2 16.9 Electric Charges for Services - - 79.8 80.8 79.8 80.8 Operating Grants and Contributions 3.4 8.3 - - 3.4 8.3 Capital Grants and Contributions 0.2 0.6 - - 0.2 0.6 General Revenues Property Taxes 14.9 15.4 - - 14.9 15.4 Transfer Taxes 5.0 4.3 - - 5.0 4.2 Gain (Loss) on sale of capital assets - - (0.5) - (0.5) - Earnings on Investments-Other - (0.4) 0.4 (3.5) 0.4 (3.9) Total Revenues 33.2 39.5 95.9 94.2 129.1 133.7 Expenses General Government 4.8 5.3 - - 4.8 5.3 Public Safety 15.1 15.4 - - 15.1 15.4 Public Works 8.5 8.7 - - 8.5 8.7 Library and Recreation 2.6 3.3 - - 2.6 3.3 Community and Economic Development 1.0 0.6 - - 1.0 0.6 Central Services 1.4 1.5 - - 1.4 1.5 Financial Administration 3.3 3.3 - - 3.3 3.3 Interest Charges 0.2 0.2 - - 0.2 0.2 Plus (less) Indirect Expense Allocation (4.8) (5.4) 4.8 5.4 - - Water/Wastewater - - 11.0 11.0 11.0 11.0 Electric - - 59.8 67.9 59.8 67.9 Total Expenses 32.1 32.9 75.6 84.3 107.7 117.2 Change in Net Position before Transfers 1.2 6.6 20.3 9.9 21.4 16.5 Transfers 11.0 12.0 (11.0) (12.0) - - Change in Net Position 12.2 18.6 9.3 (2.1) 21.4 16.5 Net Position, beginning of year 32.9 45.1 196.7 206.0 229.6 251.1 Net Position, End of Year $ 45.1 $ 63.7 $ 206.0 $ 203.9 $ 251.1 $ 267.6 Governmental Activities The preceding table shows changes in net position for the year ended June 30, 2022, compared to the year ended June 30, 2021. Governmental net position increased by $18.6 million; this is an increase of $6.4 million from the prior years’ positive change in net position of $12.2 million. Total revenues of $39.5 million were more than the prior year by $6.3 million. The increase in revenues is primarily due to increases in: charges for services, operating grants and contributions, capital grants and contributions as well as property tax receipts, which exceeded the FY21 revenues by $7.4 million. The increases were partially offset by decreases in transfer taxes and investment earnings reducing the revenues by $1.1 million. Total expenses of $32.9 million reflects an increase from the prior year by $0.8 million across all but two functions of government – Community and Economic Development – which decreased its FY22 spending by about $0.4 million and – Financial Administration – which remained constant. The increase in 119 35

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. expenditures is driven by increases in expenditures for general governmental, public safety and law enforcement, library and recreation, and central services. The chart that follows allocates revenues to program costs as applicable. It shows that some City functions are in part self-supporting, either through customer charges, or inter-fund receipts through the utilities (presented in millions of dollars): Expenses, Program Revenue & Interfund Receipts - Governmental Activities $18 $16 $15.4 $14 $12 $10 Millions $8.7 $8 $5.2 $5.8 $6 $5.2 $4.7 $4 $3.1 $3.3 $3.3 $2.5 $2 $1.5 $1.5 $1.3 $1.1 $0.6 $0.6 $0 General Public Safety Public Works Library & Community & Central Services Financial Government Recreation Economic Administration Development Interfund Receipts Revenues Expenses 120 36

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. The following chart shows the sources of funding for program costs for the last fiscal year. As can be seen, a substantial portion of funding for governmental operations is provided by property taxes, charges for services and transfers from the utilities. Revenues by Source - Governmental Activities Interfund Receipts 9% Charges for Services 20% Utility Transfer In 21% Operating Grants and Contributions 14% Capital Grants and Transfer Taxes Contributions 8% 1% Property Taxes 27% Business-Type Activities The business-type activities generated a decrease in net position of $2.1 million, which was $11.4 million less than the previous year’s change in net position of $9.3 million. The decrease was primarily due to the combination of $1.7 million in total revenue reductions, additional expense increases totaling $8.7 million. Transfers included $1.0 million transferred out of the water & wastewater funds and $11.0 million out of the electric fund to the general fund. The indirect expense allocation increased by $0.6 million. The water utility fund realized a positive change in net position of approximately $1.1 million; a decrease of $0.8 million from the prior year. Operating revenues increased by $0.5 million primarily due to an increase in water fees revenue of $0.3 million, and an increase in grants of $0.3 million, offset by decreases in rent revenue and miscellaneous income totaling $0.1 million. There was a system-wide increase in consumption for water which in turn resulted in higher billable usage of approximately 176 million total gallons. Consumption increases were primarily driven by new customer usage as there were 115 new connections this year. The billing rates in the water division were changed slightly; an increase in the water charge of $0.17 per 1,000 gallons was implemented for in-city customers and $0.26 per 1,000 gallons for outside-city customers. Operating expenses in the water fund increased by $0.9 million, which was driven mostly by a $0.4 million increase in water treatment division expenses as well as a $0.4 million increase in depreciation expense; a result of an increase in completed water treatment plant projects to the assets at the beginning of the year. Water division expenses increased by $0.2 million because of increases in salaries 121 37

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. and fringes of $0.1 million and an increase in capital outlay for miscellaneous emergency repairs that were not capitalized. An offsetting decrease of $0.1 million was in the water engineering division, due to a decrease in contractual services as the water master plan was completed in the prior year. Finally, other contributors to the decrease in net position was the increase of nonoperating expenses of $0.4 million driven mostly by a large decrease in fair value of investments of $0.3 million and $0.15 million in losses on sales of assets. The wastewater utility fund realized a positive change in net position of approximately $1.5 million; an increase of $0.7 million from the prior year. Operating revenues increased by just under $0.1 million primarily due to an increase in: wastewater fees of $0.1 million, and ground water adjustment fees of $0.1 million offset by a decrease in Kent County sewer adjustment fees of $0.1 million. There was a system- wide increase in consumption for wastewater which in turn resulted in higher billable usage of approximately 45 million total gallons. Consumption increases were primarily driven by new customer usage as there were 53 new connections in the year. The billing rates in the wastewater division were changed slightly; an increase in the wastewater charge of $0.19 per 1,000 gallons was implemented for in- city customers and $0.30 per 1,000 gallons for outside-city customers. Operating expenses in the wastewater fund decreased from the prior year by $0.8 million. The driving factor to the decrease in operating expense was a $0.9 million reduction in Kent County wastewater treatment expense offset by increases in the wastewater and engineering divisions, as well as an increase in depreciation aggregating to $0.2 million. Finally, other contributors to the change in net position was the increase of transfers out of the fund by $0.02 million due to the increase in maintenance costs of the ERP system. The electric utility fund realized a negative change in net position of $4.7 million; a decrease of $11.3 million from the prior year. Operating revenues increased by $1.0 million attributed to increases in general service billings which includes billing customers for various installations of electric infrastructure for new housing developments, smaller one-house installations as well as business installations. More kwh was purchased for commercial customers which increased the revenue by $1.0 million, however this was almost completely offset by a reduction in kwh purchased by one of the City’s larger customers, reducing revenue by $1.0 million. Additionally, there was a reduction in grants revenue of $0.2 million also offset by increases in miscellaneous revenue of $0.2 million. Operating expenses in the Electric Fund increased by about $8.2 million. A significant $12.0 million increase in power supply and generation costs, coupled with increases in the following divisions: $0.2 million in transmission and distribution, $0.1 million in engineering, and small increases in Utility tax, System Operations, and Retiree Healthcare. The increases were partially offset by a decrease of a little less than $0.8 million in General Administration which was driven primarily by a reduction in capital outlay expense of $0.1 million offset by an increase in maintenance costs for the ERP system of $0.3 million. Finally, nonoperating expenses were $3.1 million higher than the prior year primarily due to increased distribution to customers of $0.1 million. Additionally, a reduction in fair value of investments of $2.9 million and an increase in transfers out to the General Fund of $1.0 million which further reduced the significant decrease in Operating income of $15.0 million which rounds out the negative change in net position of $4.8 million, which was $11.4 million less than the prior year’s positive change of $6.6 million. 122 38

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. Operating Revenues, Expenses and Transfers - Business-Type Activities $90.0 $81 $77 $80.0 Operating Revenues & Transfers Millions $70.0 $60.0 $50.0 Operating Expenses $40.0 & Transfers $30.0 $20.0 $7 $10 $8 $10.0 $6 $- Electric Revenue Fund Water Fund Wastewater Fund Financial Analysis of the City’s Funds Governmental Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Government funds focus on expendable resources and near-term inflows and outflows of those resources. As such, fund balance is generally a good indicator of net resources available for spending at the end of the fiscal year, subject to any stated restrictions on its use. The combined fund balance of the City’s governmental funds as of June 30, 2022, was slightly over $27.6 million. This represented an increase of $8.1 million during the year. Approximately 45.5% of the combined fund balances, $12.6 million, constitutes unassigned fund balance, which is available to meet the City’s current and future needs. The remainder of fund balance is non-spendable, restricted, committed or assigned to indicate that it is not available for operational spending because it is constrained by legally enforceable contracts, other governmental agreements and legislation, City Council resolution, management, or it is not convertible to cash within a reasonable period of time. Further detail of fund balances is presented in the Notes to the Basic Financial Statements in Note 8. The General Fund is the primary operating fund of the City, accounting for such activities as general government, public safety, public works, library, recreation, planning, community and economic development, central services, and financial administration. The General Fund balance as of June 30, 2022, was $23.0 million. Revenue increased by $3.0 million, primarily due to increases in fines, licenses and permits, sanitation fees, miscellaneous services; property tax revenue, grants received and court of chancery fees. Other less significant increases were in police fines, library – general revenues, and library revenues – county reimbursement, which in aggregate exceeded the FY21 revenues by $0.2 million. The general fund revenue increases were partially offset by $0.3 million of decreases in Investment income when comparing to the prior year. 123 39

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. Total expenditures of $41.9 million reflect an increase from the prior year of $3.6 million, which was primarily driven by increases in expense of: $1.2 million in public safety and law enforcement, $1.2 million in employee pension, $0.1 in retiree health care appropriations, $0.7 million in public works, $0.1 million in streets and sanitation, $0.1 million in library services and less significant increases in recreational services, garage and stores, and insurance totaling less than $0.2 million collectively. The expense increases were offset by $0.2 million in decreases in general government and minor differences in all other functional areas round out the expense variance. Proprietary Funds The City’s proprietary funds provide the same type of information found in the government- wide financial statements, but in more detail. As of June 30, 2022, the water fund has a net position of $35.6 million, of which $6.3 million is unrestricted. The fund’s net position increased $1.1 million as explained on page 37. As of June 30, 2022, the wastewater fund had a net position of $35.3 million, of which $3.3 million is unrestricted. The wastewater fund’s net position increased $1.5 million during the year as explained on page 38. As of June 30, 2022, the electric revenue fund has a net position of $132.9 million, of which $21.6 million is unrestricted. This fund experienced a decrease in net position of $4.7 million during the year as explained on page 38. General Fund Budgetary Highlights During this fiscal year, the City Council amended the budget two times. The budget amendment ordinances were primarily for the following purposes: 1. To re-appropriate budget balances for ongoing capital projects, to amend the grant budgets and reserve accounts for the actual results from the prior fiscal year and to adjust program revenues and expenses based on actual amounts. 2. To amend revenue and expense accounts based on actual experience during fiscal year 2022. The General Fund financials in the Governmental Funds Balance Sheet (page 49) and Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds (page 51) include both the General Fund operating activities and the Governmental Capital Project Fund activities. The General Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget & Actual is included in Part D – Required Supplementary Information (pages 127-128). The Combining Schedules – Combining General Fund Balance Sheet and Combining Schedule of Revenues, Expenditures and Changes in Fund Balances of the General Fund are included in Part E – Supplementary Information (pages 142-143). The Governmental Capital Projects Fund – Schedule of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual is included in Part E – Supplementary Information (page 144). General Fund budgeted expenditures were revised to reflect an aggregate increase of $0.8 million. The 124 40

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. divisional expenditure increases were to Recreation, Life Safety, Police Extra-Duty, Streets, Council, City Manager, Finance, Public Works – Administration, Facilities Management, and Customer Services, collectively $0.5 million with minor increases in Inspections, Police, Public Works – Engineering, Human Resources and Mayor aggregating to less than $0.05 million. The operating divisions with a budgeted decrease were Stormwater and minor decreases in Planning and Procurement and Inventory. Additionally, there were decreases in non-divisional budgeted expenditures; Insurance and Transfer to Capital Project Fund. The non-divisional budgeted expenditures that increased are as follows: appropriations to the General Employee Pension and the Police Pension Funds, and a transfer to the Electric Fund. Actual revenues and other financing sources received were slightly above the final budgeted amounts in the General Fund by more than $1.2 million. The budgeted revenues that were revised to reflect an aggregate increase of $2.5 million are as follows: transfer taxes, court of chancery fees, miscellaneous charges, permits and other fees, miscellaneous state grant revenue, municipal street aid and interfund service receipts. The budgeted revenues that were revised to reflect a decrease are as follows: fines and police revenue, library revenue, recreation revenue, miscellaneous federal grant revenue, and civil traffic penalties which aggregate to $0.8 million. The net increase budgeted in revenues was $1.7 million. Capital Asset and Debt Administration At the end of the current fiscal year, the City’s governmental and proprietary funds had invested $58.3 million and $129.9 million, respectively, in a variety of capital assets and infrastructure, as reflected in the following schedule. The comparison from last year to this year exhibits a net decrease of $1.2 million for governmental activities and a net decrease of $1.0 million for the business-type activities. As the departments continue to review their assets within both the Governmental and Business-Type Activities, subsequent disposal of assets that were either replaced or disposed of in prior years, but were never removed from the asset records, or did not qualify as a Capital asset based on our current definitions, accounts for $0.48 million of the decrease in assets. For the Governmental Activities, the decrease in assets reported was in vehicles and equipment sold at auction or replaced $0.7 million, totaled vehicles and equipment $0.3 million, and traded in vehicles $0.07 million. The value of construction projects that remained open as of June 30, 2022, decreased by $1.5 million. The Business-Type Activities decreased by $1.0 million primarily because the City capitalized a number of Construction in Progress projects but did not start as many new projects due to the economic downturn created during the pandemic. Additional detailed data for all capital assets of the City is presented in the Notes to the Basic Financial Statements in Note 4. 125 41

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. The following schedule is presented in millions of dollars: Governmental Business-Type Activities Activities Total 2021 2022 2021 2022 2021 2022 Depreciable Assets, Net Buildings $ 21.5 $ 21.5 $ - $ - $ 21.5 $ 21.5 Equipment & Vehicles 4.3 4.1 5.8 7.5 10.1 11.6 General Infrastructure 26.8 27.4 - - 26.8 27.4 Utility, Plant, Buildings, and Infrastructure - - 116.9 117.0 116.9 117.0 Other 0.2 0.1 1.0 0.9 1.2 1.0 Non-depreciable Assets Land 4.6 4.6 1.6 1.6 6.2 6.2 Construction in Progress 2.1 0.6 5.6 2.9 7.7 3.5 $ 59.5 $ 58.3 $ 130.9 $ 129.9 $ 190.4 $ 188.2 The chart below shows that the City’s Total Net OPEB Liability increased by $3.8 million, with the majority of $3.0 million attributable to the Governmental Activities and the balance attributable to the Business- Type Activities of $0.8 million. The City’s Total Net Pension Liability decrease of $1.5 million was attributed to the Governmental Activities reduction of $5.5 million and the Business-Type Activities increased by $4.0 million. Additional detailed information regarding the City’s Other Post-Employment Benefits and Retirement Plans is presented in the Notes to the Basic Financial Statements in Notes 15 and 17, respectively. The City Charter limits the amount of general obligation debt the City can issue in any one year to 25% of the taxable assessed value of real property within the City. The aggregate of amounts borrowed for which the full faith and credit of the City is pledged cannot exceed 5.0% of assessed value of real property within the City boundaries. The City has used 3.41% of its debt limit. The City of Dover’s non-current liabilities as of June 30, 2021 and 2022 are presented below (in millions of dollars): Governmental Business-Type Activities Activities Total 2021 2022 2021 2022 2021 2022 Non-current liabilities Liability for Compensated Absences $ 2.7 $ 2.6 $ 0.7 $ 0.7 $ 3.4 $ 3.3 Bonds (Net of Discount/Issuance Cost) 6.6 6.1 28.3 26.7 34.9 32.8 Bond Premium - - 1.0 0.9 1.0 0.9 Net OPEB Liability 6.1 9.1 0.5 1.3 6.6 10.4 Net Pension Liability 5.8 0.3 6.2 10.2 12.0 10.5 Asset Retirement Obligation - - 11.9 11.6 11.9 11.6 $ 21.2 $ 18.1 $ 48.6 $ 51.4 $ 69.8 $ 69.5 Additional detailed data for all debt of the City is presented in the Notes to the Basic Financial Statements in Note 6. 126 42

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. Economic Factors and Next Year’s Budgets and Rates The City developed the fiscal year 2023 budget in accordance with the City’s financial policies ensuring all budgets are balanced and reserve requirements were adhered to. The City will receive over $8 million from the Federal government through the American Rescue Plan Act (ARPA), to help buffer the negative impact of the coronavirus pandemic. These funds will be spent on various capital improvement projects in the Governmental, Water, and Wastewater funds. Additionally, the City was awarded $3 million from the State of Delaware Community Reinvestment Fund (CRF), which will also be used for capital improvement projects in the Governmental, Water, and Wastewater funds. The following changes over fiscal year 2022 were incorporated into the fiscal year 2023 budget. • The FY23 General Fund budget includes a property tax increase of $.02 per $100 of assessed value on the taxable properties, as well as an increase in the base rate for Sanitation, to support the City’s taxpayers and citizens beyond FY23. Additionally, a Stormwater utility fee will begin being imposed mid-year. These increases will assist the City in: o Mitigating the impact of inflation being the highest in 40 years at almost 9%, affecting the cost of supplies, construction, and services. o Overcoming the drastic rise in fuel costs over the last year; regular gasoline rose over 63%, while diesel fuel rose over 274% since last year. o Supply chain delays and shortages affecting not only the ability to complete projects in a timely manner, resulting in higher than budgeted costs, but also scheduled replacement of vehicles and equipment. This results in more frequent break downs, higher maintenance costs, and reduced overall efficiency. o Preparing for personnel and resources needed to accommodate for population growth that’s estimated to reach 40,000 people in the next couple of years. o Significant impacts of personnel related costs including fixed union contract increases, built-in step increases, and pension and other benefit cost increases. Additionally, a competitive job market is driving up salaries, hiring bonuses, and benefit offerings, in order to reduce employee turnover and attract qualified applicants. o Keeping up with the continuing technological advances, while phasing out older, and obsolete technologies as they are not supported by vendors. o Complying with several unfunded mandates such as the minimum wage increases, expanded Family Leave provisions, legislation requiring electric vehicle charging stations. • The budgets for the Water and Wastewater Funds include another year of rate increases. This is the third of a four-year plan to adjust rates. The additional revenues from the rate increase will assist with infrastructure improvements, will help to alleviate some of the impacts of the inflationary and supply chain issues noted above, and help to establish a prudent reserve over time. • Due to rapidly escalating wholesale energy costs, driven by record breaking natural gas prices, up more than 82%, rate surcharges, Power Cost Adjustments, and reduction of fund transfers, the Electric Fund has eliminated the PCA credit for its customers in the coming year. Additionally, a 30% electric rate surcharge has been added to customers’ bills. Purchase power costs are projected to rise from $50.1 million in FY22 to $91.5 million in FY23. • This budget includes minimal new personnel, in consideration of the financial challenges, but it allows for expansion where it’s needed most, and contraction wherever possible. The Tax Assessor’s office has been phased out, and remaining staff will merge with the Customer Service department, while Stormwater is adding a new Program Manager halfway through the year. The 127 43

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part B – Management’s Discussion and Analysis Item 5. Police Department will be adding 2 new dispatchers, and 2 new civilian employees to accommodate the population increase projected above. • Decommissioning of McKee Run Power Plant #3 continues. The City continues to closely monitor the local economy and its impact on growth and revenues. Revenue enhancements, rate increases, and potential cost reductions will continue to be reviewed in order to maintain the City’s financial policies. Contacting the City’s Financial Management This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact Ms. Lori Peddicord, Controller/Treasurer at 302-736-4452 (TTY/TDD Operator 1-800-855-1155). 128 44

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section Item 5. PART C BASIC FINANCIAL STATEMENTS 129 45

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. This page intentionally left blank 130 46

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Statement of Net Position June 30, 2022 Governmental Business-Type Activities Activities Total Assets: Cash and Cash Equivalents $ 16,723,835 $ 17,678,094 $ 34,401,929 Investments 9,854,760 36,539,792 46,394,552 Receivables, Net 3,122,503 8,910,185 12,032,688 Internal Balances 204,195 (204,195) - Due from Other Governments 50,898 - 50,898 Inventory 195,250 3,221,113 3,416,363 Prepaid Items 163,241 522,010 685,251 Restricted Cash and Cash Equivalents 5,192,573 15,552,128 20,744,701 Restricted Investments 19,198 54,803,658 54,822,856 Capital Assets, Not Being Depreciated 5,226,166 4,554,350 9,780,516 Capital Assets, Net of Depreciation 53,111,745 125,306,495 178,418,240 Total Assets 93,864,364 266,883,630 360,747,994 Deferred Outflows of Resources: Pension related Deferred Outflows 6,523,707 1,952,292 8,475,999 OPEB related Deferred Outflows 5,033,110 1,285,928 6,319,038 Total Deferred Outflows of Resources 11,556,817 3,238,220 14,795,037 Liabilities: Accounts Payable and Accrued Liabilities 1,538,811 5,019,343 6,558,154 Unearned Revenue 337,685 456,862 794,547 Customer Deposits - 2,616,709 2,616,709 Other 69,694 349,866 419,560 Liabilities Due within One Year 1,848,537 2,397,122 4,245,659 Non-Current Liabilities Due in more than One Year 6,902,736 25,896,580 32,799,316 Due in more than One Year - OPEB 9,074,534 1,284,491 10,359,025 Due in more than One Year - Pension 268,089 10,196,786 10,464,875 Due in more than One Year - ARO - 11,618,846 11,618,846 Total Liabilities 20,040,086 59,836,605 79,876,691 Deferred Inflows of Resources: Pension related Deferred Inflows 10,882,499 - 10,882,499 OPEB related Deferred Inflows 8,638,474 2,546,131 11,184,605 Lease related Deferred Inflows 2,152,256 3,857,054 6,009,310 Total Deferred Inflows of Resources 21,673,229 6,403,185 28,076,414 Net Position: Net Investment in Capital Assets 52,211,316 102,312,686 154,524,002 Restricted for: Capital Projects 114,487 70,355,786 70,470,273 Public Safety Grants 137,583 - 137,583 Verizon Grant 64,814 - 64,814 Library Grant 191,612 - 191,612 Community Development Grants 1,141 - 1,141 ARPA Grant 4,165,545 - 4,165,545 Unrestricted 6,821,368 31,213,588 38,034,956 Total Net Position $ 63,707,866 $ 203,882,060 $ 267,589,926 The notes to financial statements are an integral part of this statement. 131 47

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Statement of Activities For the Year Ended June 30, 2022 Net (Expense) Revenue and Program Revenues Changes in Net Position Indirect Operating Capital Grants Expenses Charges for Grants and and Governmental Business Type Expenses Allocation Services Contributions Contributions Activities Activities Total Functions/Programs Governmental Activities General Government $ 5,240,126 $ (1,282,383) $ 3,087,530 $ 13,421 $ - $ (856,792) $ - $ (856,792) Public Safety 15,419,359 - 4,232,464 1,526,728 - (9,660,167) - (9,660,167) Public Works 8,715,801 (605,342) 3,575,614 1,141,633 520,975 (2,872,237) - (2,872,237) Library and Recreation 3,313,073 - 414,787 965,175 98,500 (1,834,611) - (1,834,611) Community and Economic Development 607,606 - - 4,690,131 - 4,082,525 - 4,082,525 Central Services 1,533,404 (1,076,281) - - - (457,123) - (457,123) Financial Administration 3,274,300 (2,456,986) - - - (817,314) - (817,314) Interest Charges 185,468 - - - - (185,468) - (185,468) Total Governmental Activities 38,289,137 (5,420,992) 11,310,395 8,337,088 619,475 (12,601,187) - (12,601,187) Business Type Activities Water 4,322,543 946,979 7,086,239 - - - 1,816,717 1,816,717 Wastewater 6,691,272 707,230 9,783,269 - - - 2,384,767 - Electric 67,913,576 3,766,783 80,782,417 - - - 9,102,058 9,102,058 Total Business Type Activities 78,927,391 5,420,992 97,651,925 - - Total Primary Government $ 117,216,528 $ - $ 108,962,320 $ 8,337,088 $ 619,475 (12,601,187) 13,303,542 702,355 General Revenues Taxes Property Taxes 15,370,628 - 15,370,628 Transfer Taxes 4,256,847 - 4,256,847 Loss on Investments (351,255) (3,430,291) (3,781,546) Total General Revenues 19,276,220 (3,430,291) 15,845,929 Transfers 11,975,000 (11,975,000) - Total General Revenues and Transfers 31,251,220 (15,405,291) 15,845,929 Changes in Net Position 18,650,033 (2,101,749) 16,548,284 Net Position Beginning 45,057,833 205,983,809 251,041,642 Net Position Ending $ 63,707,866 $ 203,882,060 $ 267,589,926 The notes to financial statements are an integral part of this statement. 48 132

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Governmental Funds Balance Sheet June 30, 2022 Total Total General Nonmajor Governmental Fund Funds Funds Assets: Cash and Cash Equivalents $ 14,443,325 $ - $ 14,443,325 Restricted Cash and Cash Equivalents - 5,192,573 5,192,573 Investments 8,344,847 - 8,344,847 Restricted Investments 19,198 - 19,198 Receivables, Net Accounts 2,789,933 272,805 3,062,738 Taxes 54,765 - 54,765 Due from Other Funds 743,621 - 743,621 Temporary Advances 40,000 - 40,000 Due from Other Governments - 50,898 50,898 Prepaid Items 158,549 4,692 163,241 Inventory 195,250 - 195,250 Total Assets $ 26,789,488 $ 5,520,968 $ 32,310,456 Liabilities: Accounts Payable $ 1,263,490 $ 88,639 $ 1,352,129 Unearned Revenue 92,498 245,187 337,685 Due to Other Funds 48 539,378 539,426 Temporary Advances - 40,000 40,000 Other 69,694 - 69,694 Total Liabilities 1,425,730 913,204 2,338,934 Deferred Inflows of Resources: Unavailable Revenue 209,083 - 209,083 Leases Revenue 2,152,256 - 2,152,256 Total Deferred Inflows of Resources 2,361,339 - 2,361,339 Fund Balances: Non-Spendable 375,393 4,692 380,085 Restricted 67,418 4,603,072 4,670,490 Committed 2,163,317 - 2,163,317 Assigned 7,809,060 - 7,809,060 Unassigned 12,587,231 - 12,587,231 Total Fund Balances 23,002,419 4,607,764 27,610,183 Total Liabilities, Deferred Inflows and Fund Balances $ 26,789,488 $ 5,520,968 $ 32,310,456 The notes to financial statements are an integral part of this statement. 133 49

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position June 30, 2022 Amounts reported for governmental activities in the statement of net position (page 47) are different because: Total fund balances for governmental funds (Page 49) $ 27,610,183 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 58,337,911 Other assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the funds. Deferred inflows of resources 209,083 The Net Pension Liability & OPEB Liability is not due and payable in the current period; therefore, the liability and related deferred inflows/outflows are not reported in governmental funds: Deferred Outflows - Pension $ 6,523,707 Deferred Inflows - Pension (10,882,499) Deferred Outflows - OPEB 5,033,110 Deferred Inflows - OPEB (8,638,474) (7,964,156) An internal service fund (page 53) is used by the City to charge the cost of the workers' compensation fund. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net position. 3,609,489 Accrual basis of bond interest paid (748) Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities both current and long-term are reported in the statement of net position. Compensated absences represent amounts accrued for sick leave for those employees who are vested and accrued vacation for all employees. The Net Pension Liability and OPEB Liability are not a use of current financial resources, and therefore, are not reported in the governmental funds. Current- General Obligation Bonds (496,788) Compensated Absences (1,347,902) (1,844,690) Long-Term- General Obligation Bonds (5,614,421) Compensated Absences (1,277,549) Leases (14,613) Net Pension Liability (268,089) Net OPEB Liability (9,074,534) (16,249,206) (18,093,896) Total net position of governmental activities (Page 47) $ 63,707,866 The notes to financial statements are an integral part of this statement. 134 50

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds For the Year Ended June 30, 2022 Total Total General Nonmajor Governmental Fund Funds Funds Revenues Fines $ 508,080 $ 198,594 $ 706,674 Library Revenue - General 120,687 - 120,687 Library Revenue County Reimbursement 139,902 - 139,902 Licenses and Permits 3,100,889 - 3,100,889 Sanitation Fees and Rebates 3,371,689 - 3,371,689 Recreation - 25,593 25,593 Miscellaneous Services 1,882,688 - 1,882,688 Property Taxes 15,288,770 - 15,288,770 Transfer Taxes - 4,256,847 4,256,847 Grants 1,861,844 7,094,719 8,956,563 Court of Chancery Fees 2,095,840 - 2,095,840 Investment Income (307,024) 10,518 (296,506) Total Revenues 28,063,365 11,586,271 39,649,636 Expenditures Current: General Government 1,749,343 1,749,343 Library Services 1,723,517 269,890 1,993,407 Public Safety and Law Enforcement 22,743,269 362,337 23,105,606 Public Works 3,569,333 520,975 4,090,308 Recreational Services 1,157,441 - 1,157,441 Streets and Sanitation Services 3,762,686 - 3,762,686 Engineering Services 191,358 - 191,358 Financial Administration 783,575 - 783,575 Garage and Stores 853,904 - 853,904 Insurance 388,361 - 388,361 Retiree Health Care 2,156,000 - 2,156,000 Employee Pension Appropriation 1,234,300 - 1,234,300 Community and Economic Development 150,000 457,606 607,606 Street Lights 826,038 - 826,038 Debt Service: Principal Retirement 487,315 - 487,315 Interest and Fiscal Charges 144,822 - 144,822 Total Expenditures 41,921,262 1,610,808 43,532,070 Excess (deficiency) of Revenues over Expenditures (13,857,897) 9,975,463 (3,882,434) Other Financing Sources (Uses) Transfers In 17,745,150 194,515 17,939,665 Transfers Out (25,000) (5,939,665) (5,964,665) Total other Financing Sources (Uses) 17,720,150 (5,745,150) 11,975,000 Net Change in Fund Balances 3,862,253 4,230,313 8,092,566 Fund Balances at Beginning of Year 19,140,166 377,451 19,517,617 Fund Balances at End of Year $ 23,002,419 $ 4,607,764 $ 27,610,183 The notes to financial statements are an integral part of this statement. 135 51

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2022 Amounts reported for governmental activities in the statement of activities (page 48) are different because: Net change in fund balances--total governmental funds (Page 51) $ 8,092,566 Governmental fund reports capital outlays as expenditures. However, in the statement of activities the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capitalization of net capital asset expenditures including CIP $ 3,324,372 Loss on assets disposed of during the year (751,767) Current year depreciation (3,792,703) Leases 773 (1,219,325) Governmental funds report the repayment of principal of general long-term debt as an expenditure but the repayment reduces the liability in the statement of net position. 487,315 Revenues that are not available to pay for current period expenditures are not reported as revenues in the funds. (51,709) Governmental funds do not report GAAP related pension entries that record the Net Pension Liability. The following is the current year change in Net Pension Liability for the Governmental funds: 5,573,690 Changes in Deferred Inflows and Deferred Outflows related to pension entries reported in the Statement of Activities. (34,070) Decreases in operating expenses due to the decrease in OPEB expense for the amortization of deferred outflows and inflows of resources related to the net OPEB liability. 8,227,137 Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for the transactions that are not normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition, assets are not recognized in governmental funds unless they represent current financial resources but are recognized in the statement of activities as they accrue. The following differences, therefore, occur between the statement of activities and the governmental funds. Decrease in compensated absences $ 53,571 Bond interest accrual (40,647) Increase in Net OPEB Liability (3,005,688) (2,992,764) An internal service fund is used by the City to charge the costs of workers' compensation insurance to individual funds. The change in net position of the internal service fund is transferred to the governmental funds and amounts attributable to internal charges are then allocated to functional expenditures. Net revenue is allocated back to respective functions and business type activities, as appropriate. 567,193 Change in net position of governmental activities (Page 48) $ 18,650,033 The notes to financial statements are an integral part of this statement. 136 52

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Statement of Net Position - Proprietary Funds Proprietary Funds June 30, 2022 Governmental Business-type Activities Activities Electric Total Water Wastewater Revenue Enterprise Internal Fund Fund Fund Funds Service Fund Assets Current Assets: Cash and Cash Equivalents $ 2,874,005 $ 2,489,138 $ 12,314,951 $ 17,678,094 $ 2,280,510 Investments 5,429,615 2,866,517 28,243,660 36,539,792 1,509,913 Receivables, Net 3,769,698 548,483 4,592,004 8,910,185 5,000 Due from Other Funds 114,057 24 - 114,081 - Inventory 34,918 - 3,186,195 3,221,113 - Prepaid Items - - 522,010 522,010 - Total Current Assets 12,222,293 5,904,162 48,858,820 66,985,275 3,795,423 Non-Current Assets: Restricted Assets Cash 336,971 136,927 15,078,230 15,552,128 - Investments 2,395,787 5,595,061 46,812,810 54,803,658 - Capital Assets, Not Being Depreciated 178,253 518,359 3,857,738 4,554,350 - Capital Assets, Net of Depreciation 33,652,268 31,820,361 59,833,866 125,306,495 - Total Non-Current Assets 36,563,279 38,070,708 125,582,644 200,216,631 - Total Assets 48,785,572 43,974,870 174,441,464 267,201,906 3,795,423 Deferred Outflows of Resources: Pension Related Deferred Outflows 640,257 196,495 1,115,540 1,952,292 - OPEB Related Deferred Outflows 331,142 190,408 764,378 1,285,928 - 971,399 386,903 1,879,918 3,238,220 - Liabilities Current Liabilities: Accounts Payable and Accrued Expenses 189,415 983,840 3,846,088 5,019,343 185,934 Due to Other Funds - Charges 46,868 166,633 104,775 318,276 - Unearned Revenue - - 456,862 456,862 - Accrued Interest Payable 55,242 28,149 266,475 349,866 - Customer Deposits - - 2,616,709 2,616,709 - Revenue Bonds Payable 589,309 505,416 947,482 2,042,207 - Liability for Compensated Absences 80,851 38,952 235,112 354,915 - Total Current Liabilities 961,685 1,722,990 8,473,503 11,158,178 185,934 Non-Current Liabilities: Net OPEB Liability 262,083 160,919 861,489 1,284,491 - Net Pension Liability 2,290,413 1,348,702 6,557,671 10,196,786 - Asset Retirement Obligation - - 11,618,846 11,618,846 - Revenue Bonds Payable 6,607,991 5,493,138 13,404,823 25,505,952 - Liability for Compensated Absences 129,661 28,090 232,877 390,628 - Total Non-Current Liabilities 9,290,148 7,030,849 32,675,706 48,996,703 - Total Liabilities 10,251,833 8,753,839 41,149,209 60,154,881 185,934 Deferred Inflows of Resources: OPEB Related Deferred Inflows 703,533 273,683 1,568,915 2,546,131 - Lease Related Deferred Inflows 3,134,874 - 722,180 3,857,054 Total Deferred Inflows of Resources 3,838,407 273,683 2,291,095 6,403,185 - Net Position Net Investment in Capital Assets 26,633,220 26,340,167 49,339,299 102,312,686 - Restricted for Capital Construction 2,732,758 5,731,988 61,891,040 70,355,786 - Unrestricted 6,300,753 3,262,096 21,650,739 31,213,588 3,609,489 Total Net Position $ 35,666,731 $ 35,334,251 $ 132,881,078 $ 203,882,060 $ 3,609,489 The notes to financial statements are an integral part of this statement. 137 53

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds For the Year Ended June 30, 2022 Governmental Business-type Activities Activities Electric Total Water Wastewater Revenue Enterprise Internal Fund Fund Fund Funds Service Fund Operating Revenues Charges for Services $ 6,144,754 $ 9,385,564 $ 78,616,488 $ 94,146,806 $ - Miscellaneous Services/Income 1,091,510 194,661 2,165,929 3,452,100 979,993 Total Operating Revenues 7,236,264 9,580,225 80,782,417 97,598,906 979,993 Operating Expenses Water 591,806 - - 591,806 - Wastewater - 900,500 - 900,500 - Water Treatment Plant 1,744,009 - - 1,744,009 - Water/Wastewater Engineering 220,511 171,967 - 392,478 - Kent County Wastewater Treatment - 3,852,858 - 3,852,858 - General Administrative 974,678 697,675 5,075,096 6,747,449 155,014 Power Supply - - 50,314,242 50,314,242 - Transmission/Distribution - - 2,896,187 2,896,187 - Engineering - - 1,017,239 1,017,239 - Metering - - 219,794 219,794 - Systems Operations - - 482,066 482,066 - Utility Tax - - 1,151,067 1,151,067 - Depreciation 1,354,618 1,544,451 3,816,555 6,715,624 - Contractual Services - - - - 9,197 Taxes - - - - 26,888 Retirees Health Care 192,000 93,000 843,500 1,128,500 - Self Insurance-Workers' Compensation - - - - 166,952 Total Operating Expenses 5,077,622 7,260,451 65,815,746 78,153,819 358,051 Operating Income/Loss 2,158,642 2,319,774 14,966,671 19,445,087 621,942 Non-Operating Revenues (Expenses) Interest Earned: Operating Funds 165,385 39,072 285,956 490,413 - Reserve Funds 50,397 88,887 820,360 959,644 25,999 Net Decrease in Fair Value of Investments (416,113) (450,697) (4,013,538) (4,880,348) (80,748) Interest and Fiscal Charges (191,900) (138,051) (451,960) (781,911) - Distribution of Earnings - PCA Credit - - (5,060,676) (5,060,676) - Gain (Loss) on Sale of Assets (150,025) 203,044 (351,977) (298,958) - Total Non-Operating Revenue (expenses) (542,256) (257,745) (8,771,835) (9,571,836) (54,749) Income before Contributions and Transfers 1,616,386 2,062,029 6,194,836 9,873,251 567,193 Transfers In - - 75,000 75,000 - Transfers Out (525,000) (525,000) (11,000,000) (12,050,000) - Total transfers (525,000) (525,000) (10,925,000) (11,975,000) - Change in Net Position 1,091,386 1,537,029 (4,730,164) (2,101,749) 567,193 Total Net Position--Beginning 34,575,345 33,797,222 137,611,242 205,983,809 3,042,296 Total Net Position--Ending $ 35,666,731 $ 35,334,251 $ 132,881,078 $ 203,882,060 $ 3,609,489 The notes to financial statements are an integral part of this statement. 138 54

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Statement of Cash Flows - Proprietary Funds For the Year Ended June 30, 2022 Governmental Business-type Activities Activities Electric Total Water Wastewater Revenue Enterprise Internal Fund Fund Fund Funds Service Fund Cash Flows from Operating Activities Receipts from Customers $ 7,113,204 $ 9,479,720 $ 80,983,246 $ 97,576,170 $ - Payments to Suppliers (including Purchased Power) (2,333,258) (4,073,599) (55,544,278) (61,951,135) (209,712) Payments to Employees (1,636,880) (902,878) (5,325,792) (7,865,550) - Payments of Personnel Related Costs (1,099,385) (518,725) (2,526,545) (4,144,655) 979,823 Internal Activity-Payments from (to) Other Funds (225,517) (91,913) (1,109,693) (1,427,123) - Other Receipts (Payments) including Claims Paid (93,619) (133,271) (1,473,817) (1,700,707) (271,440) Net Cash Provided by (used for) Operating Activities 1,724,545 3,759,334 15,003,121 20,487,000 498,671 Cash Flows from Noncapital Financing Activities Transfers Out (525,000) (525,000) (11,000,000) (12,050,000) - Transfers In - - 75,000 75,000 - Distribution to Customers - PCA Credit - - (5,060,676) (5,060,676) - Net Cash Used for Noncapital Financing Activities (525,000) (525,000) (15,985,676) (17,035,676) - Cash Flows from Capital and Related Financing Activities Acquisition and Construction of Capital Assets (478,497) (769,087) (4,858,817) (6,106,401) - Proceeds of issuance of debt - 248,450 - 248,450 - Principal Paid on Revenue Bond Maturities (575,374) (478,534) (820,000) (1,873,908) - Interest Paid on Capital Debt (191,900) (138,052) (451,960) (781,912) - Net Cash Used for Capital and Related Financing Activities (1,245,771) (1,137,223) (6,130,777) (8,513,771) - Cash Flows from Investing Activities Interest on Investments 165,385 39,072 285,956 490,413 - Purchase of Investment Securities (518,571) (289,706) (1,048,123) (1,856,400) 5,019 Interest on Restricted Cash 50,397 88,887 820,360 959,644 - Net Cash Provided by (used for) Investing Activities (302,789) (161,747) 58,193 (406,343) 5,019 Net Increase/Decrease in Cash and Cash Equivalents (349,015) 1,935,364 (7,055,139) (5,468,790) 503,690 Cash and cash equivalents July 1 (incl. $738,463 for Water Fund, $308,551 for Wastewater Fund and $16,600,618 for Electric fund reported in restricted accounts) 3,559,991 690,701 34,448,320 38,699,012 1,776,820 Cash and cash equivalents June 30 (incl. $336,971 for Water Fund, $136,927 for Wastewater Fund and $15,078,230 for Electric fund reported in restricted accounts) $ 3,210,976 $ 2,626,065 $ 27,393,181 $ 33,230,222 $ 2,280,510 Reconciliation of Operating Income to Net Cash Provided by (Used for) Operating Activities: Operating Income $ 2,158,642 $ 2,319,774 $ 14,966,671 $ 19,445,087 $ 621,942 Adjustments to Reconcile Operating Income to Net Cash provided by (Used for) Operating Activities: Depreciation Expense 1,354,618 1,544,451 3,816,555 6,715,624 - Effect of Changes in Operating Assets and Liabilities: Receivables (3,143,880) (100,484) (411,105) (3,655,469) - Due from other funds (114,054) (21) - (114,075) - Inventory 22,685 (1,060) (226,655) (205,030) - Prepaid items - - (79,846) (79,846) - Deferred outflow of resources Pension (640,257) (196,495) (1,115,540) (1,952,292) - Deferred outflow of resources OPEB (202,127) (109,929) (439,715) (751,771) - Accounts payable and accrued expenses (1,073,838) 370,511 (1,175,222) (1,878,549) (123,271) Unearned revenue - - (145,529) (145,529) - Due to other funds 17,707 (20,724) (367,584) (370,601) - Customer Deposits - - 35,283 35,283 - Liability for Compensated Absences 5,110 (17,211) 18,435 6,334 - Asset Retirement Obligation (297,003) 2,837,871 - Net OPEB Liability 217,416 118,244 472,976 808,636 - Net pension liability 1,343,153 397,900 2,216,769 3,957,822 - Deferred inflow of resources Leases 3,134,874 - 722,180 3,857,054 - Deferred inflow of resources Pension (962,521) (331,894) (2,132,638) (3,427,053) - Deferred inflow of resources OPEB (392,983) (213,728) (854,911) (1,461,622) - Net Cash Provided by Operating Activities $ 1,724,545 $ 3,759,334 $ 15,003,121 $ 20,487,000 $ 498,671 Non-Cash Investing, Capital and Financing Activities: Change in Fair Value of Investments $ (416,113) $ (450,697) $ (4,013,538) $ (4,880,348) $ (22,399) The notes to financial statements are an integral part of this statement. 139 55

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Statement of Net Position Fiduciary Funds June 30, 2022 Pension and Other Post-Employment Custodial Benefit Trust Funds Funds Assets Cash and Cash Equivalents $ 11,308,291 $ 29,258 Investments at Fair Value - Mutual Funds 100,372,021 - Prepaid Expenses - 25,000 Total Assets 111,680,312 54,258 Liabilities Vouchers Payable & Deposit Payable 456,931 - Total Liabilities 456,931 - Net Position Net Position Restricted for Pensions 62,880,563 - Net Position Restricted for Health Benefits 48,342,818 - Net Position Restricted for Other Organizations - 54,258 Total Net Position $ 111,223,381 $ 54,258 The notes to financial statements are an integral part of this statement. 140 56

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Basic Financial Statements Item 5. City of Dover, Delaware Statement of Changes in Net Position Fiduciary Funds For the Year Ended June 30, 2022 Pension and Other Postemployment Custodial Benefit Trust Funds Funds Additions: Net Investment Income $ (19,267,484) $ - City's Contribution-Payroll Based 4,005,975 - City's Contribution-Lump Sum 5,134,000 6,000 Employee Contribution 171,257 - Gifts/Donations - 44,140 State Grants 668,521 - Other 3,341 23 Total Additions (9,284,390) 50,163 Deductions: Bank Fees - 199 Benefit Payments 8,981,652 - Contractual Services - 38,470 General Administration 71,282 5,422 Transfer to Governmental Capital Project Fund - 2,500 Total Deductions 9,052,934 46,591 Change in Net Position (18,337,324) 3,572 Net Position - Beginning 129,560,705 50,686 Net Position - Ending $ 111,223,381 $ 54,258 The notes to financial statements are an integral part of this statement. 141 57

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C Item 5. INDEX Notes to the Basic Financial Statements PAGE 1. FINANCIAL REPORTING ENTITY ............................................................. 61 A. The City of Dover, Delaware .................................................................................... 61 B. Reporting Entity ....................................................................................................... 61 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ............................. 61 A. Basis of Presentation ............................................................................................... 62 B. Basis of Accounting and Measurement Focus ......................................................... 64 C. New Pronouncements ............................................................................................. 65 D. Capital Assets and Long-Term Liabilities.................................................................. 65 E. Budget Procedures................................................................................................... 66 F. Major Transfers ........................................................................................................ 67 G. Inventory and Prepaid Items ................................................................................... 68 H. Cash and Investments .............................................................................................. 68 I. Accounts Receivable ................................................................................................ 68 J. Restricted Assets ...................................................................................................... 69 K. Bond Accounts/Issuance Costs ................................................................................ 69 L. Deferred Outflows/Inflows of Resources ................................................................ 69 M. Fund Balances and Net Position .............................................................................. 70 N. Estimates .................................................................................................................. 70 O. Net Position Flow Assumption ................................................................................. 70 3. DEPOSITS AND INVESTMENTS .............................................................. 71 A. Cash in Bank and Cash Equivalents ......................................................................... 71 B. Investments.............................................................................................................. 71 4. CAPITAL ASSETS ................................................................................... 77 5. LEASES ................................................................................................. 82 6. LONG-TERM OBLIGATIONS ................................................................... 83 A. Summary of Bonded Indebtedness by Issue............................................................ 83 B. Status as of June 30, 2021 – General Obligation Bonds ......................................... 84 C. Change in Long-Term Debt ...................................................................................... 84 D. Debt Service Requirements ..................................................................................... 85 E. Certain Asset Retirement Obligation ....................................................................... 88 7. RESTRICTED NET POSITION .................................................................. 88 59 143

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C Item 5. INDEX Notes to the Basic Financial Statements PAGE 8. FUND BALANCES & NET POSITION ........................................................ 89 9. PROPERTY TAXES ................................................................................ 90 10. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS ......................... 91 A. Due To/From Other Funds – Charges and Allocations ............................................ 91 B. Temporary Advances ............................................................................................... 91 C. Interfund Transfers .................................................................................................. 91 11. MATERIAL COMMITMENTS ................................................................. 92 12. FORWARD CONTRACTS ........................................................................ 92 13. INSURANCE .......................................................................................... 95 A. Health Insurance – State of Delaware ..................................................................... 95 B. Workers’ Compensation Fund – Self-Insurance ..................................................... 95 C. Other than Health or Workers’ Compensation Insurance ....................................... 95 14. COMPENSATED ABSENCES ................................................................... 95 15. OTHER POST-EMPLOYMENT BENEFITS ................................................. 96 16. DEFERRED COMPENSATION PLAN ........................................................ 105 17. RETIREMENT PLANS ............................................................................ 106 A. Defined Contribution Plan ................................................................................... 106 B. Defined Benefit Plans ......................................................................................... 107 60 144

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2022 1. FINANCIAL REPORTING ENTITY A. The City of Dover, Delaware The City of Dover, Delaware (the City) was incorporated in 1829 and is a municipal corporation governed by an elected mayor and a nine-member council. The accompanying financial statements present the financial position and operating results for fiscal year ended June 30, 2022. B. Reporting Entity In evaluating how to define the reporting entity for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit was made by applying the criteria set forth in Generally Accepted Accounting Principles in the United States of America (GAAP). GAAP defines the reporting entity as the primary government, and those component units for which the primary government is financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board and either a) the ability to impose will by the primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. Based upon this criterion, the following is a brief review of each potential component unit addressed in defining the government’s reporting entity. Included within the reporting entity: The City provides many services as follows - police protection, street maintenance, sanitation, storm water maintenance, recreation, library, community development, public improvements, planning, safety inspections, electric generation and distribution, water and wastewater services, legislative services, and general administration, including employee benefits. These functions are part of the City’s daily operations and therefore are not legally separate component units. Not included within the reporting entity: The City joined the State of Delaware Police Pension Plan for uniformed police officers employed by the City after September 1, 1982. The plan is completely managed by the State of Delaware and, therefore, is not included in the financial statements. The Robbins Hose Volunteer Fire Company, Downtown Dover Partnership, and the Capital School District are not included within the financial reporting entity because they do not meet the criteria for inclusion set forth by GAAP. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. A summary of the more significant policies follows: 61 145

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. A. Basis of presentation Government-wide Statements: The statement of net position and the statement of activities include the financial activities of the overall government, except for fiduciary activities. Individual funds are not displayed but the statements distinguish governmental activities, generally funded by taxes and other City revenue, from business-type activities (BTAs), generally funded in whole or in part with fees charged to external users. Eliminations have been made for the doubling-up effect of certain internal activities, however, interfund services provided and used are not eliminated in the process of consolidation. The government-wide statement of activities presents a comparison between direct program expenses and program revenues for each function of the City’s governmental activities and for each of the City’s identifiable business-type activities. Direct expenses are those that are specifically associated with a program, function, or activity. Program revenues include a) charges paid by the recipients or beneficiaries of goods or services offered by the programs and b) grants and contributions that are restricted for meeting the operational or capital requirements of programs. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. The City allocates the costs of certain governmental services to the costs of business-type activities (indirect expense allocation). These costs include allocated amounts of city management, centralized budgetary formulation and oversight, accounting, financial reporting, payroll, fleet and building maintenance, procurement contracting and oversight, investing and cash management, personnel services, etc. The allocations are charged to the BTAs based on the use of these services. As a matter of policy, the costs of certain governmental functions are not allocated to the business-type activities such as tax assessor, planning and zoning, public safety, library and recreation and community services. Fund Financial Statements: The accounts of the City are organized based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflows/outflows, fund equity, revenues and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. The fund financial statements provide information about the City’s funds, including fiduciary funds. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as non-major funds. The City reports the following major governmental fund: General Fund The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. 62 146

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. The City reports the following major proprietary funds: Electric Revenue Fund This fund incorporates all transactions related to the transmission and distribution, as well as generation of electricity. The City has contracted with both The Energy Authority and North American Energy Services to manage the City’s power supply and generation assets. Water Fund This fund accounts for transactions related to water services. The City also holds lease agreements with cell phone companies for equipment placed on City water towers. Wastewater Fund This fund accounts for transactions related to wastewater services, including the payment of fees to Kent County for the treatment of sewage. The City reports the following non-major funds: Internal Service Fund The City has created one internal service fund to account for the activities related to self-insured Workers’ Compensation. Receipts are provided from contributions by the City’s general fund and it’s three enterprise funds. Expenses are related to payment of claims, premiums, and administration costs. Actuarial analyses are completed every three (3) years to ensure sufficient reserves for claims for the Workers’ Compensation Fund. The last analysis was done on June 30, 2019. Special Revenue Funds The City has eleven (11) Special Revenue Funds to account for proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Fiduciary Funds Fiduciary funds consist of trust and custodial funds and are used to report assets held by the City in a trustee or custodial capacity for other purposes. These funds are, therefore, not available to support City programs. The City is the trustee for the City’s two pension plans: the Police Pension Fund, and the Employee Pension Fund, as well as the Other Post-Employment Benefit Trust. The activities of these plans are accounted for in the Basic Financial Statements. Custodial Funds Custodial funds are used to account for assets held by the City as a custodian for individuals, private organizations, or other governments. The City has three (3) custodial funds. The City acts as the receiving and paying agent for the Fourth of July Celebration Committee, the Dover Days Celebration Committee, and Dover Strong. 63 147

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. B. Basis of Accounting and Measurement Focus Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting and the current financial resources measurement focus. Their revenues are recognized when they become measurable and available as net current assets. Revenues that are susceptible to accrual include property taxes, grants, and billable service charges. All other revenues are accounted for when they are received. Property taxes are recognized in the fiscal period during which they are levied, provided they are “available;” meaning they are collected in the current period or are expected to be collected soon enough thereafter to satisfy liabilities in the current period. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year- end, except for trash collection, which has a thirty-day collection period. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. The exception to this general rule is principal and interest on general long-term debt which is recognized when due. Also, claims and judgments and compensated absences are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. The government-wide financial statements as well as all proprietary and fiduciary funds are accounted for using the accrual basis of accounting and the economic resources measurement focus. A reconciliation of the governmental fund financial statements prepared on the modified accrual basis of accounting to the government-wide financial statements prepared on the accrual basis of accounting is also provided on pages 50 & 52. The types of transactions included in program revenues in the government-wide statement of activities include charges for services, operating grants, and capital grants. Operating income reported in the proprietary fund financial statements includes revenue and expenses related to the continuing operations of the funds. Charges to customers for sales and services constitute the principal operating revenue for proprietary funds. All revenues not meeting this definition are reported as non-operating. Principal operating expenses are the costs of providing goods and services, which include purchased power, administrative expenses, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The City generally first uses restricted assets for expenses incurred for which both restricted and unrestricted assets are available. The City may defer the use of restricted assets based on a review of the specific transaction. 64 148

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. C. New Pronouncements The City has adopted the provisions of Governmental Accounting Standard Board (GASB) issued Statement No. 87 entitled Leases, Standard Implementation Guide No. 2019-3 Leases, Statement No. 91 entitled Conduit Debt Obligations, No. 92 entitled Omnibus 2021, Statement No. 93 entitled Replacement of Interbank Offered Rates, and Statement No. 97 entitled Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans-an amendment of GASB Statements No.14 and No. 84, and a supersession of GASB Statement No. 32, and Implementation Guide No. 2019-1, Implementation Guidance Update- 2019. The adoption of these GASB statements did not have a material effect on the statements. As of June 30, 2022, GASB issued Statement No. 94 entitled Public-Private Partnerships and Availability Payment Arrangements and Statement No. 96 entitled Subscription-Based Information Technology Arrangements. The City has not yet completed the process of evaluating the impact of these pronouncements on its financial statements D. Capital Assets and Long-Term Liabilities Capital assets used in Governmental Fund type operations (general capital assets) are accounted for in the government-wide financial statements rather than in the funds. Public domain ("infrastructure") general capital assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, are capitalized in the government-wide financial statements along with other general capital assets. The capitalization threshold for the City’s assets is $5,000. Personal computers and related hardware valued under $5,000 are manually controlled by the Information Technology Department. All capital assets are valued at historical cost and donated capital assets are shown at acquisition value based on the developers’ cost of the infrastructure. Depreciation has been provided on general capital assets and is shown in Note 4. Depreciation has been provided over the estimated useful lives using the straight-line method. Estimated useful lives are as follows: Buildings 20 – 50 years Infrastructure 20 – 50 years Vehicles 5 – 7 years Equipment, Furniture & Fixtures 5 – 15 years Long-term liabilities expected to be financed from governmental funds and the long-term estimated liabilities for compensated absences are accounted for in the government-wide financial statements, but not in the governmental funds. Depreciation of all exhaustible capital assets used by proprietary funds is charged as an expense against their operations. Accumulated depreciation is shown in Note 4 of this section. Depreciation in the proprietary funds has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are presented below: 65 149

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Building, Mains & Plant 25 – 90 years Improvements 15 – 20 years Equipment 5 – 15 years Vehicles 5 – 7 years Capital assets are maintained substantially and reported in accordance with the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission (FERC) for the Electric Fund and the National Association of Regulatory Utility Commissioners (NARUC) for the Water and Wastewater Fund. E. Budget Procedures Legally adopted budgets are prepared for the General Fund, Water Fund, Wastewater Fund, Electric Revenue Fund, the Internal Service Fund, and the following non-major special revenue funds: Police Federal Grants Fund, Police State Grants Fund, Library Grants Fund, Municipal Street Aid Fund, Community Development Block Grant Fund (Federal), State Department of Transportation Grants Fund (Community Transportation), Substance Abuse Prevention Program Fund, Electronic Red-Light Safety Program Fund, Lodging Tax Fund, ARPA Grant Fund, and the Realty Transfer Tax Fund. The General Governmental Capital Projects Fund provides for separate budgets to cover the planning and control of capital items for the governmental programs. The financial transactions of this fund are included in the financial statements of the General Fund. The Electric Improvement and Extension Fund, the Water Improvement and Extension Fund, and the Wastewater Improvement and Extension Fund are sections of each utility enterprise. These sections are required by bond resolutions. Separate budgets for these funds cover the planning and control of only the capital items of the utilities. The financial transactions of these funds are included in the financial statements of the Electric Revenue Fund, the Water Fund, and the Wastewater Fund. The City prepares the budget for the General Fund revenues on a basis consistent with the modified accrual basis. The expenditures are accounted for when the purchase orders are issued. The budget and actual schedule in the legal budget format (non-GAAP), adopted by the City for the General Fund, the City’s major governmental fund, is presented in the required supplementary information section of this report. Budgets for the Electric Revenue Fund, Water Fund, Wastewater Fund, and Internal Service Fund are prepared on an accrual basis. Budgets are prepared under the assumption that the principal redemption of long-term debt must be assumed by Enterprise Fund activity in conformity with the bond ordinance. The Combining General Fund Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the General Fund as well as the budget and actual schedules of the other funds are also presented in the supplementary information section of this report because they are not required to be presented elsewhere. According to the City's procedures, the preceding year's ending net budgetary balances are considered as resources for the following year. The beginning balances become operating items of revenues in the budgets. Estimated ending budgetary balances provide the balancing amount for each budget. In accordance with the City’s financial policies, adopted by City Council, the General, 66 150

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Water, and Wastewater funds are required to maintain an 8% minimum ending budget balance and the Electric fund is required to maintain a 12% minimum. These percentages are expressed as a percentage of operating revenues, excluding the beginning budget balance. Unassigned fund balances as a percentage of current year operating revenues on a budgetary basis for the General Fund, Water Fund, Wastewater Fund, and Electric Fund are 25.3%, 29.4%, 29.8% and 26.6% respectively, and all are exceeding the financial policy maximum for each fund. Per the Financial policy, the overages for all funds will be addressed in the next year’s budget. The City Manager may approve transfers of savings from completed CIP items to non-completed CIP items. Any transfers that cause the item or project to exceed its original budget 10% or greater will be communicated to City Council and the Controller/Treasurer. The City Manager may approve intra- fund transfers (i.e., within the General Fund) of up to five percent per annum, except for line items associated with salary and benefits. Budget amendments exceeding that authorized above or that affect budget balances shall be referred to City Council. (Source: City of Dover Policy Manual, Budget Administration – Policy for Operating Departments, 2014). The following activities exceeded their budget: 1. Police Extra-Duty is over budget by $10,156, but is offset by Grant revenue. 2. The City Manager’s Office is over budget by $40,206 resulting from an overage in salaries due to attrition. 3. Debt Service exceeded the budget by $137 due to interest on the new HVAC loan, which was not budgeted. 4. Transfer to Cable Franchise Reserve of $13,421 was not budgeted. 5. Appropriation to Police Pension Fund - State Grant is over budget by $168,520 due to the receipt of State of Delaware funds exceeding the budgeted amount and then passed through to the Police Pension Fund as an expenditure. 6. Appropriation to cover Street Light expense was low by $26,038. In all cases, the increase was needed to meet operational requirements of the City. F. Major Transfers The Electric Revenue Fund, Water Fund, and Wastewater Fund annually transfer a budgeted portion of their revenues to the General Fund. Transfers are also made from the Realty Transfer Tax Fund, Municipal Street Aid Fund, Electronic Red-Light Safety Program (ERLSP) Fund and both Police Grant Funds (State & Federal) to the General Fund. The purpose of these transfers is to provide routine subsidies to the General Fund for operating functions, capital project expenditures and debt service requirements. The Lodging Tax receipts are only to be used for infrastructure, according to City Ordinance #2019-16. Therefore, amounts received in this fund are transferred to the General Governmental Capital Projects Fund. Several Special Revenue Funds represent a pass-through of revenues collected by the State of Delaware on behalf of the City or other State revenues provided for in Delaware Code. These receipts 67 151

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. are subsequently transferred to the General Fund in support of public safety, City maintenance of State roads and other public services. Several transfers between the General Fund and the non-major governmental funds are netted in the government-wide financial statements. G. Inventory and Prepaid Items Both inventory and prepaid items are accounted for using the consumption method. Inventory are treated as operational expenditures at the time of use rather than at the time of purchase for both the governmental and proprietary funds. Prepaid items are reflective of insurance policies and commitments due on July 1 for the following fiscal year. The warehouse inventories, consisting mostly of parts and supplies, are maintained on a perpetual inventory basis. Inventories of all funds are valued at cost and net of reserves, utilizing a weighted moving average method of valuation. The City maintains inventory reserves to charge off any damaged or obsolete items. The Electric Revenue Fund maintains fuel inventory for the generating assets on a perpetual basis and utilizes the weighted average method of valuation. H. Cash and Investments The City's cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the acquisition date. Investments consist of notes and bonds issued by the United States Government and its agencies, corporate debt instruments, common stock, and open-end mutual funds. I. Accounts Receivable Allowances for uncollectible accounts are maintained and uncollectible accounts are charged off against these allowances. The authority to write off accounts is vested with the City Council. Current balances of allowances are as follows: General Fund $604,110 Water Fund 21,313 Wastewater Fund 19,925 Electric Revenue Fund 1,355,455 68 152

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. J. Restricted Assets Certain assets are restricted because their use is limited by bond covenants, endowments, or other similar third-party restrictions. Restricted assets as of June 30, 2022, total $75,567,557 including cash and cash equivalents of $20,744,701 and $54,822,856 in investments. Of this amount, $5,211,771 is attributed to governmental activities and $70,355,786 is attributable to business-type activities. K. Bond Accounts/Issuance Costs The City recognizes issuance costs in governmental funds, as well as the proprietary funds, as a current period expense in accordance with GASB 65. All unamortized bond discounts and issuance costs held by the general fund and the proprietary funds have been expensed in prior years. L. Deferred Outflows/Inflows of Resources The statement of net position, in addition to reporting assets and liabilities, reports a separate section for deferred outflows / inflows of resources. Deferred outflows / inflows of resources represent either a consumption or acquisition of net position that applies to a future period(s) and will not be recognized as an outflow / inflow (expense / revenue) of resources until that period. The City’s deferred outflows / inflows of resources are reported on the government-wide statement of net position and proprietary funds statement of net position for pension and Other Post- Employment Benefits (OPEB). For purposes of measuring the OPEB and pension liability, deferred outflows of resources and deferred inflows of resources related to OPEB and pensions, and OPEB and pension expense, information about the fiduciary net position of the OPEB and pension plans and additions to/deductions from their fiduciary net position have been determined on the same basis as they are reported by the City of Dover’s OPEB Trust and pension systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. The OPEB and pension systems report investments at fair value. Deferred inflows of resources related to OPEB, and pensions are explained in Notes 15 and 17, respectively. The City also reports unavailable revenue as a deferred inflow of resources only in the governmental funds balance sheet, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. The governmental funds report unavailable revenues from property taxes, demolitions, general billings, grass cutting, police extra-duty, state grants, and lease activity. M. Fund Balances and Net Position Governmental fund balances are reported based on a hierarchy of constraints on the nature or specific purpose to which the funds can be spent. The classifications of fund balance are as follows: 69 153

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. • The non-spendable fund balance classification includes amounts that cannot be spent either because they are in a non-spendable form or because they are legally or contractually required to be maintained intact. • The restricted fund balance classification includes amounts that can be spent only for specific purposes defined by the City Charter, the City Code, State or Federal laws, or externally imposed conditions by grantors or creditors. • The committed fund balance classification includes amounts that can be used only for specific purposes determined by the formal action by City Council through a motion or an adopted City Ordinance which is approved by a majority vote of City Council, the City’s highest level of decision- making authority. • The assigned fund balance classification includes amounts authorized and established by City Council. The City’s financial policies as adopted by City Council includes the purpose and description of all classes of fund balance. Modifications require City Council approval. • The unassigned fund balance classification includes amounts that have not met the criteria of the previously mentioned fund balance classifications. The unassigned fund balance is available for expenditures as they are incurred. The general fund is the only fund that reports a positive unassigned fund balance amount. The City considers restricted, committed, or assigned amounts to have been spent when a related expenditure is incurred. Proprietary funds report net position in three categories: 1) Net investment in capital assets 2) Restricted and 3) Unrestricted Fund balances and net position are further explained in Note 7. N. Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. O. Net Position Flow Assumption Sometimes the City will fund outlays for a specific purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. To calculate the amounts reported as restricted and unrestricted net position and fund balance in the government-wide, proprietary fund, and governmental fund financial statements, a flow assumption must be made about the order in which the resources are applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position is applied. 70 154

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 3. DEPOSITS AND INVESTMENTS A. Cash in Bank and Cash Equivalents Custodial credit risk – deposits. The City’s depository institutions collateralize the City’s deposits over and above those covered by the $250,000 FDIC Insurance limit with specific securities, which are ‘marked to market’ daily against the aggregate balances. The market value of the collateral is at a minimum of or equal to 102% of the amount of applicable deposits. Collateral consists solely of full faith and credit obligations of the United States Government or fixed rate obligations of agencies or instruments of the United States Government. As of June 30, 2022, the carrying amount of unrestricted cash and cash equivalents totaled $34,401,929, and the bank cash balances totaled $35,302,688. The carrying amount of restricted cash totaled $20,744,701 and the bank cash balances on restricted accounts totaled $20,731,054 and $2,814,970 of the bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. Fiduciary funds cash and cash equivalents carrying value of $11,337,549 included $11,337,562 of cash deposits. The restricted deposits are held by the City for bond-related transactions, special purpose operating and capital grants. B. Investments The City Council has adopted an investment policy which is reviewed every two years and updated as needed to meet best practices. The Pension Boards have adopted their own distinct investment policies to govern the Pension Trust funds because the objectives differ from those of the City. The City’s investments are segregated from the Pension Trust investments for clarity. As of June 30, 2022, the City had the following investments: Investments Held by Third Party Custodian The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The City’s government wide investments are held in several different investment capacities from mutual funds and certificate of deposit with a significant investment in debt securities. • Level 1 – Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets. • Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets or identical assets or liabilities in less active markets, such as dealer or broker markets; and • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models and similar techniques not based on market, exchange, dealer, or broker-traded transactions. 71 155

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. The City recorded the following investments as of June 30, 2022: Fair Value Measurements Using: Quoted Prices Significant Weighted in Active Other Average Markets Observable Maturity for Identical Inputs Investment Type (Years) June 30, 2022 Assets (Level 1) (Level 2) Government-Wide: Investments by fair value level Debt securities: U.S. Government Treasuries 1.90 $ 24,084,548 $ - $ 24,084,548 Federal Agency Bond / Note 2.08 18,875,619 582,923 18,292,696 Municipal Obligations 2.35 5,406,345 - 5,406,345 Domestic Fixed Income 2.76 31,500,882 - 31,500,882 International Fixed Income 2.76 9,421,189 - 9,421,189 Federal Agency mortgage backed security* 9.00 2,156,590 583,767 1,572,823 Total Investments by fair value level 2.52 91,445,173 $ 1,166,690 $ 90,278,483 Other Investments, at amortized cost: Money Market Mutual Funds & Equity Stock 8,392,668 Certificates of Deposit 4,444,535 Total other investments 12,837,203 Total Government-Wide Investments 104,282,376 Less: Cash and Cash Equivalents Money Market Funds & Certificates of Deposit (3,064,968) Total Investments per statement of net position $ 101,217,408 Interest rate risk: As a means of limiting its exposure to fair value losses arising from rising interest rates the City’s investment policy limits U.S. Government securities and most other investments to a maximum maturity of 10 years from the date of purchase. Commercial Paper, Bankers’ Acceptances and Repurchase Agreements all have a much shorter investment period ranging from 90 days to 365 days. Short-term cash flow balances are invested up to one year. The portfolio’s weighted average maturity is 2.52 years. * For asset backed and Agency mortgage-backed securities, the maximum maturity shall be defined as the weighted average life (“WAL”). WAL is a convention that estimates the expected weighted amount of time, in years, for the principal amount of an issue to be fully paid. For Agency mortgage-backed securities, WAL shall be limited to 10 years, measured at the settlement date, provided by Bloomberg Financial Markets. As of June 30, 2022, Federal Agency mortgage- backed security WAL is 9.00. Credit risk: The City’s investment policy applies the prudent-person rule. Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital and, in general, avoid speculative investments. As of June 30, 2022, the City’s fixed income and short-term investments carried the following S&P Global Credit Ratings as compared to the policy’s minimum ratings: 72 156

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Policy Minimum Percent Authorized Investments Rating Category Portfolio Ratings Allocation U.S. Government Treasuries N/A N/A 23.10% U.S. Government Agency Bonds/Notes N/A N/A 20.17% Certificates of Deposit and Short-Term A-1 Short-Term A-1 to A-1+ 4.26% Time Deposits Long-Term AA N/A 0.00% Corporate Debt Issued by a US Corporation Commercial Paper A-1 N/A 0.00% Corporate Notes/Bonds A BBB+ to AAA 30.21% International Fixed Income A AAA 9.03% Repurchase Agreements ST A-1; LT AA N/A 0.00% Registered Investment Companies AAAm AAAm 8.05% (Money Market Funds) Municipal Obligations A A to AAA 5.18% Concentration of credit risk: As of June 30, 2022, United States Treasury Notes represented 25.07% of the portfolio, Federal National Mortgage Association represented 11.22% of the portfolio and Federal Home Loan Mortgage Association represented 7.02% of the portfolio. No other issuer exceeded 5% of the portfolio. Investments Held by Trustee for Other Post-Employment Benefits & Pensions The Pension Trusts and OPEB Trust invest exclusively in open-end mutual funds. The fair value is measured using the net asset value (NAV) as quoted in active markets in a manner consistent with the measurement principles for investment companies calculated as of June 30, 2022. 73 157

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Investment Type June 30, 2022 Other Postemployment Benefits (OPEB) & Employee's Police OPEB Pension Funds (Trustee held): Plan Plan Trust Total Investments measured at the net asset value (NAV) Money market funds $ 1,871,211 $ 727,230 $ 1,241,549 $ 3,839,990 Fixed Income: Short-term bond funds 2,477,078 932,771 3,201,991 6,611,840 Intermediate-term bond funds 1,915,555 450,827 2,300,983 4,667,365 Long-term bond funds 2,227,350 698,963 1,847,384 4,773,697 Inflation-protected bond funds 2,807,738 734,228 2,090,373 5,632,339 High yield bond funds 2,299,001 721,428 2,462,172 5,482,601 Nontraditional bond funds 1,885,261 591,595 2,268,914 4,745,770 Total Fixed Income 13,611,983 4,129,812 14,171,817 31,913,612 Equities: Large-cap value funds 3,230,428 1,013,705 3,474,858 7,718,991 Large-cap growth funds 3,674,397 1,153,029 4,818,994 9,646,420 Mid-cap value funds 1,768,665 555,006 4,368,100 6,691,771 Mid-cap blend funds 1,690,387 530,444 - 2,220,831 Small-cap value funds 2,918,714 915,888 1,908,563 5,743,165 Small-cap growth - - 1,728,695 1,728,695 International growth funds 3,169,014 994,435 3,643,434 7,806,883 World stock funds 2,911,168 913,526 3,965,329 7,790,023 Infrastructure funds 2,437,893 765,011 - 3,202,904 Diversified emerging market funds 4,617,746 1,449,052 5,117,632 11,184,430 Real estate funds 1,744,560 547,439 2,432,297 4,724,296 Total Equities 28,162,972 8,837,535 31,457,902 68,458,409 Total investments measured at the NAV $ 41,774,955 $ 12,967,347 $ 45,629,719 $ 100,372,021 74 158

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. The City recorded the following OPEB and Pension investments as of June 30, 2022: Quoted Prices in Active Markets for Identical Investment Type June 30, 2022 Assets (Level 1) Other Postemployment Benefits (OPEB) & Pension Funds Investments by fair value level Mutual Funds $ 100,372,021 $ 100,372,021 Limits on investments are as follows: Category Allocation Target Percentage Employee's Police OPEB Plan Plan Trust Cash & Short Term Bonds 11.00% 13.00% 9.00% Non-traditional Bonds 4.00% 4.00% 4.50% Inflation Protected Bonds 6.00% 5.00% 4.00% Intermediate Term Bonds 4.00% 3.00% 4.50% Long Term Bonds 5.00% 5.00% 4.00% High Yield Bond 5.00% 5.00% 5.00% Large Cap Value 7.00% 7.00% 7.00% Large Cap Growth 9.00% 9.00% 11.00% Mid Cap 8.00% 8.00% 9.00% Small Cap 7.00% 7.00% 8.00% Real Estate Investment 4.00% 4.00% 5.00% Infrastructure 5.00% 5.00% 0.00% Foreign Equity 15.00% 15.00% 18.00% Emerging Markets 10.00% 10.00% 11.00% 100.00% 100.00% 100.00% Custodial Credit Risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. To avoid custodial credit risk, the City requires all investments held with a third-party custodian to be registered in the City’s name. Interest Rate Risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Pension and OPEB Plans’ investment policies formally address interest rate risk. As of June 30, 2022, the Pension and OPEB plans had $31,913,612 in fixed income investments. The weighted average maturity for all its fixed income funds was 6.36 years. Credit Risk: The OPEB Plan’s investments are exposed to both market risk, the risk arising from changes in fair value, and credit risk, the risk of failure by another party to perform according to the terms of a contract. The Pension and OPEB Plan’s investment balances on June 30, 2022, consisted of open-ended mutual funds. Concentration of Credit Risk: Concentration of credit risk is the risk of loss attributable to the magnitude of an investment in a single issuer. The Pension and OPEB Plan’s investment policies do not formally 75 159

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. address concentration of credit risk. The Pension and OPEB Plans held no positions of five percent or more in securities of any single issuer on June 30, 2022. Foreign Currency Risk is the risk that changes in the exchange rate of investments will adversely affect the fair value of an investment. As of June 30, 2022, the Pension and OPEB Plans had no investments that were denominated in foreign currency. 76 160

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 4. CAPITAL ASSETS A summary of the capital asset activity for the year ended June 30, 2022, is presented below and on the following four pages: Beginning Ending Balance Increases Decreases Adjustments Balance Governmental activities: Capital assets, not being depreciated Land $ 4,620,356 $ - $ - $ - $ 4,620,356 1 Construction in progress 2,132,004 1,328,362 2,821,571 (32,985) 605,810 Total capital assets, not being depreciated 6,752,360 1,328,362 2,821,571 (32,985) 5,226,166 Capital assets, being depreciated: Buildings 28,993,253 629,423 45,770 - 29,576,906 Furniture and fixtures 759,375 - - - 759,375 Equipment 9,421,657 875,306 1,449,780 - 8,847,183 Vehicles 6,585,122 563,231 462,521 - 6,685,832 Lights 655,646 - - - 655,646 Improvements other than buildings 61,073,599 2,782,604 - - 63,856,203 Total capital assets, being depreciated 107,488,652 4,850,564 1,958,071 - 110,381,145 Less accumulated depreciation for: Buildings (7,495,752) (635,069) 43,611 9,692 (8,077,518) Furniture and fixtures (666,815) (65,337) - - (732,152) 2 (7,044,092) (382,572) 1,263,196 - (6,163,468) Equipment 2 Vehicles (4,667,343) (544,235) 256,249 (354,017) (5,309,346) Lights (549,705) (11,576) - - (561,281) Improvements other than buildings (34,281,726) (2,153,915) - (5,380) (36,441,021) Total accumulated depreciation (54,705,433) (3,792,704) 1,563,056 (349,705) (57,284,786) Total capital assets, being depreciated, net 3 52,783,219 1,057,860 (395,015) (349,705) 53,096,359 Governmental activities capital assets, net $ 59,535,579 $ 2,386,222 $ 3,216,586 $ (382,690) $ 58,322,525 1 The capital asset adjustment within the Construction in Progress section above is due to some prior year expenses which were donations or maintenance costs. 2 The adjustments in vehicles depreciation was due to some Police Department assets that were reclassified from equipment to vehicles. 3 The addition of leased assets is the difference between this schedule and the financial statements. (Continued) 77 161

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. (Continued) Beginning Ending Balance Increases Decreases Adjustments Balance Business-type activities: Water Fund Capital assets, not being depreciated Land $ 130,438 $ - $ - $ - $ 130,438 1 1,267,821 166,548 1,376,654 (9,900) 47,815 Construction in progress Total capital assets, not being depreciated 1,398,259 166,548 1,376,654 (9,900) 178,253 Capital assets, being depreciated Buildings 2 9,685,222 - - 105 9,685,327 Distribution Mains/Accessories 25,734,479 613,592 - - 26,348,071 Pumping stations 13,159,265 783,200 707,604 - 13,234,861 Sewer Lines 38,284 - - - 38,284 Vehicles and equipment 3 5,274,981 428,783 336,700 (35,514) 5,331,550 Total capital assets, being depreciated 53,892,231 1,825,575 1,044,304 (35,409) 54,638,093 Less accumulated depreciation for: Buildings (1,008,688) (425,555) - - (1,434,243) Vehicles and equipment 3 (3,805,452) (198,542) 336,700 (35,927) (3,703,221) Distribution Mains/Accessories (9,530,357) (490,953) - (7,094) (10,028,404) Pumping Stations (6,070,203) (238,809) 508,936 - (5,800,076) Sewer Lines (19,122) (759) - - (19,881) Total accumulated depreciation (20,433,822) (1,354,618) 845,636 (43,021) (20,985,825) Total capital assets, being depreciated, net 33,458,409 470,957 (198,668) (78,430) 33,652,268 Total water fund capital assets, net $ 34,856,668 $ 637,505 $ (1,575,322) $ (88,330) $ 33,830,520 1 The capital asset adjustment to Construction In Progress was for inspections and maintenance in the Wellhead Redevelopment Program. 2 The capital asset adjustment to Buildings was due to a corrected invoice which was added to the Water Treatment Plant Improvements project from FY21. 3 The capital asset and accumulated depreciation adjustments to Vehicles and Equipment were due to a conversion error that had the wrong accounts for 3 assets. (Continued) 78 162

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. (Continued) Beginning Ending Balance Increases Decreases Adjustments Balance Business-type activities: Wastewater Fund Capital assets, not being depreciated Land $ 32,802 $ - $ - $ - $ 32,802 Construction in progress 780,100 485,557 780,100 - 485,557 Total capital assets, not being depreciated 812,902 485,557 780,100 - 518,359 Capital assets, being depreciated Buildings 62,041 - - - 62,041 Distribution Mains/Accessories 204,662 - - - 204,662 1 17,821,199 1,612,500 2,128 2,250 19,433,821 Pumping Stations 1 35,197,157 70,000 - 19,222 35,286,379 Sewer Lines 2 2,689,419 139,462 94,533 35,514 2,769,862 Vehicles and equipment Total capital assets, being depreciated 55,974,478 1,821,962 96,661 56,986 57,756,765 Less accumulated depreciation for: Buildings (44,686) (2,681) - - (47,367) Vehicles and Equipment (1,696,469) (174,518) 94,532 (102,219) (1,878,674) Distribution mains, hydrant, and accessories (17,836) (2,869) - - (20,705) Pumping Stations (6,232,035) (579,123) 1,011 (508,936) (7,319,083) Sewer Lines (15,885,315) (785,260) - - (16,670,575) Total accumulated depreciation (23,876,341) (1,544,451) 95,543 (611,155) (25,936,404) Total capital assets, being depreciated, net 32,098,137 277,510 (1,117) (554,169) 31,820,361 Total wastewater fund capital assets, net $ 32,911,039 $ 763,068 $ (781,217) $ (554,169) $ 32,338,721 1 The capital asset adjustments to Pumping Stations and Sewer Lines were FY22 improvements to existing assets. 2 The capital asset and accumulated depreciation adjustments to Vehicles and Equipment were due to a conversion error that had the wrong accounts for 3 assets. (Continued) 79 163

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. (Continued) Beginning Ending Balance Increases Decreases Adjustments Balance Business-type activities: Electric Revenue Fund Capital assets, not being depreciated Land $ 1,458,066 $ - $ - $ - $ 1,458,066 1 3,504,551 2,475,116 3,564,490 (15,505) 2,399,672 Construction in progress Total capital assets, not being depreciated 4,962,617 2,475,116 3,564,490 (15,505) 3,857,738 Capital assets, being depreciated Buildings 12,583,811 2,557,244 1,853,657 - 13,287,398 Vehicles and Equipment 29,024,484 2,217,686 189,516 - 31,052,654 Transformers, Meters, T&D & Fiber Optic Lines, Street Lights 2 67,146,050 2,673,895 33,635 28,961 69,815,271 SS, Switch Yards, Switchgears 36,728,771 - - - 36,728,771 Boiler, Turbo Generators, Cap Int - VS 39,122,189 - - - 39,122,189 Other (Streets, EST, Swr Lines, Wells, Eng & Legal Svcs, Land Impr) 7,662,503 - - - 7,662,503 Total capital assets, being depreciated 192,267,808 7,448,825 2,076,808 28,961 197,668,786 Less accumulated depreciation for: Buildings (10,429,064) (119,768) - - (10,548,832) Vehicles and Equipment 3 (25,737,948) (481,505) 127,231 - (26,092,222) Transformers, Meters, T&D & Fiber Optic Lines, Street Lights 3 (40,807,716) (1,744,377) 1,028 - (42,551,065) SS, Switch Yards, Switchgears (17,684,502) (967,352) - - (18,651,854) Boiler, Turbo Generators, Cap Int - VS (32,817,182) (390,940) - - (33,208,122) Other (Streets, EST, Swr Lines, Wells, Eng & Legal Svcs, Land Impr) (6,670,212) (112,613) - - (6,782,825) Total accumulated depreciation (134,146,624) (3,816,555) 128,259 - (137,834,920) Total capital assets, being depreciated, net 58,121,184 3,632,270 (1,948,549) 28,961 59,833,866 Total electric revenue fund capital assets, net $ 63,083,801 $ 6,107,386 $ (5,513,039) $ 13,456 $ 63,691,604 1 The capital asset adjustment within the Construction in Progress section above is due to a maintenance expense for McKee Run Power Plant and a small project that was under the $5,000 threshold. 2 The adjustments in Transformers, etc. is a combination of improvements and corrections to useful life. 3 Adjustments to depreciation are due to an input error and a conversion error which resulted in the assets not being depreciated in previous years. (Continued) 80 164

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. (Continued) Beginning Ending Balance Increases Decreases Adjustments Balance Total Business-type Activities $ 130,851,508 $ 7,507,959 $ (7,869,578) $ (629,043) $ 129,860,845 Capital Assets, not being depreciated 7,173,778 3,127,221 (5,721,244) (25,405) 4,554,350 Capital Assets, being depreciated, net 123,677,730 4,380,737 (2,148,334) (603,638) 125,306,495 Total $ 130,851,508 $ 7,507,958 $ (7,869,578) $ (629,043) $ 129,860,845 General government $ 14,488 Central services 46,074 Public safety 501,494 Public works 2,482,485 Library and recreation 704,564 Financial administration 43,598 Total depreciation expense - governmental activities $ 3,792,704 81 165

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 5. LEASES The City leases two parcels of land on its Garrison Tract, relating to the Garrison Oak Business & Technology Center that result in rent revenue reported in the General Fund. The first lease is with LS Power – White Oak Solar Energy LLC, which generated $71,285 in rental income, and the second lease is with Garrison Energy Center which generated $37,198 in rental income. The total lease revenue generated by the City’s Electric Revenue Fund is $128,877, consisting of $65,339 for pole attachment rentals which began in fiscal year 2020, Dark Fiber leases in the amount of $33,538, and an annual substation rental of $30,000. The City maintains several water tower leases for a group of telecommunications companies. The transactions are recorded as revenue in the Water Fund and totaled $502,821 in the fiscal year ended June 30, 2022. The total amount of inflows of resources relating to leases recognized in the current fiscal year are as follows: Governmental Business-type Activities Activities Total Lease revenue $ 63,263 $ 4,422,661 $ 4,485,924 Interest revenue 9,137 - 9,137 As of June 30, 2022, the principal and interest requirements to maturity for the lease receivable are as follows: Governmental Activities Business-type Activities Principle Interest Total Principle Interest Total 2023 $ 35,197 $ 76,174 $ 111,371 $ 346,112 $ 213,602 $ 559,714 2024 39,996 75,297 115,293 372,797 198,118 570,915 2025 45,135 74,239 119,374 401,218 181,302 582,520 2026 50,637 72,985 123,622 431,500 163,048 594,548 2027 56,524 71,518 128,042 437,539 143,239 580,778 2028-2032 386,354 326,878 713,232 1,550,889 398,409 1,949,298 2033-2037 608,283 246,786 855,069 377,002 98,809 475,811 2038-2042 916,773 113,242 1,030,015 - - - 2043-2047 58,575 550 59,125 - - - $ 2,197,474 $ 1,057,669 $ 3,255,143 $ 3,917,057 $ 1,396,527 $ 5,313,584 As a lessee, the City Police Department leases a part of a firing range for firearm practice and qualification. In FY22, there are 4 years remaining on the lease, for $5,000 per year. 82 166

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 6. LONG -TERM OBLIGATIONS A. Summary of Bonded Indebtedness by Issue Original Remaining Interest Maturity Arbitrage Purpose Governmental Activities 2019 General Obligation Bonds $ 5,700,000 $ 4,692,900 2.39% 7/18/19 - 6/30/29 No Refund General Obligation Bonds Series 2012 and Series 2014 A, which funded public safety equipment and library, storm water and street infrastructure projects 2021 General Obligation Bonds 1,563,000 1,418,309 1.69% 7/15/21 - 6/15/31 No Provide funds to pay a portion of the costs of: Chiller replacement and cooling tower/pump replacement for Police Department, replace entire HVAC system at City Hall, replace HVAC system and all components at the Warehouse building and pay costs of issuance. Business Type Activities Water Bonds 2010 State of Delaware - Revolving 2,404,017 1,222,425 2.47% 4/1/12 - 10/1/30 No Water quality improvements and main replacements Loan Fund - Municipal Revenue Water and Wastewater capital project financing, refund 2003 Series WWW 2013 Revenue Bonds 4,295,463 2,328,316 3.58% 7/1/14 - 7/1/33 Yes bonds 2018 State of Delaware - Revolving 4,000,000 3,646,559 2.00% 12/1/20 - 6/1/39 No Water Treatment Plant Improvements Loan Fund - Municipal Revenue Wastewater Bonds 2009 State of Delaware - Revolving 5,581,059 2,989,127 2.00% 12/1/12 - 12/1/31 No Pump station replacements/upgrades and sanitary sewer main relining Loan Fund - Municipal Revenue 2011 State of Delaware - Revolving 765,060 464,149 2.00% 6/1/12 - 12/1/31 No Pump station replacements/upgrades and sanitary sewer main relining Loan Fund - Municipal Revenue Water and Wastewater capital project financing, refund 2003 Series WWW 2013 Revenue Bonds 1,829,538 991,684 3.58% 7/1/14 - 7/1/33 Yes bonds 2018 State of Delaware - Revolving Replacement of 3 Pump Stations: Delaware Tech, Walker Woods and 881,356 821,394 2.00% 10/1/20 - 4/1/39 No Loan Fund - Municipal Revenue Silver Lake 2020 State of Delaware - Revolving 732,200 732,200 2.00% 8/1/22 - 8/1/41 No Puncheon Run pump station grit removal system replacement Loan Fund - Municipal Revenue (Coverage ratio on Water/Wastewater Bonds requires net revenues to be at least 1.2 times the maximum annual debt service) Electric Revenue Bonds Refund Electric Revenue Bonds Series 2008, which funded system 2018 Revenue Bonds 15,700,000 13,445,000 3 - 5% 7/1/19 - 7/1/33 Yes expansion & upgrades (Coverage ratio on Electric Bonds requires net revenues to be at least 1.25 times the maximum annual debt service) 83 167

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. B. Status as of June 30, 2022 – General Obligation Bonds Long-term indebtedness of the City of Dover consists of Series 2019 General Obligation Bonds totaling $4,692,900 and Series 2021 General Obligation Bonds totaling $1,418,309 for a grand total of $6,111,209 in outstanding bonds. The total General Obligation Bonds outstanding amount includes $496,788 payable within one year. C. Change in Long-Term Debt The following tables summarize the debt transactions for the year ended June 30, 2022: General Long-Term Debt Payable within Item Balance 7/1/21 Additions Reductions Balance 6/30/22 One Year Police Officer Separation Agrmt $ 37,500 $ - $ 37,500 $ - $ - Compensated Absences 2,679,022 1,612,508 1,666,079 2,625,451 1,347,902 General Obligation Bonds 6,598,524 - 487,315 6,111,209 496,788 Lease Liability - 19,233 4,620 14,613 3,847 Net OPEB Liability 6,068,847 3,005,687 - 9,074,534 - Net Pension Liability 5,841,779 - 5,573,690 268,089 - Sub-total of General Long-Term Debt $ 21,225,672 $ 4,637,428 $ 7,769,204 $ 18,093,896 $ 1,848,537 Enterprise Funds Debt – Water and Wastewater Fund WATER FUND Payable within Item Balance 7/1/21 Additions Reductions Balance 6/30/22 One Year Compensated Absences $ 205,402 $ 123,095 $ 117,985 $ 210,512 $ 80,851 Revenue Bonds-Water 2,598,317 - 270,001 2,328,316 277,014 State of Delaware Municipal Revenue Bond - Water 5,174,358 - 305,374 4,868,984 312,295 Net OPEB Liability 44,667 217,416 - 262,083 - Net Pension Liability 947,260 1,343,153 - 2,290,413 - Sub-total of Water Fund $ 8,970,004 $ 1,683,664 $ 693,360 $ 9,960,308 $ 670,160 WASTEWATER FUND Payable within Item Balance 7/1/21 Additions Reductions Balance 6/30/22 One Year Compensated Absences $ 84,254 $ 47,166 $ 64,378 $ 67,042 $ 38,952 Revenue Bonds-Wastewater 1,106,683 - 114,999 991,684 117,986 State of Delaware Municipal Revenue Bond - Wastewater 5,121,954 248,450 363,534 5,006,870 387,430 Net OPEB Liability 42,675 118,244 - 160,919 - Net Pension Liability 950,802 397,900 - 1,348,702 - Sub-total of Wastewater $ 7,306,368 $ 811,760 $ 542,911 $ 7,575,217 $ 544,368 84 168

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Enterprise Funds Debt – Electric Revenue Fund Payable within Item Balance 7/1/21 Additions Reductions Balance 6/30/22 One Year Compensated Absences $ 449,554 $ 312,144 $ 293,709 $ 467,989 $ 235,112 Revenue Bonds 14,265,000 - 820,000 13,445,000 865,000 Bond Premium 989,787 - 82,482 907,305 82,482 Net OPEB Liability 388,513 472,976 - 861,489 - Net Pension Liability 4,340,902 2,216,769 - 6,557,671 - Asset Retirement Obligation 11,915,849 - 297,003 11,618,846 - Sub-total of Electric Revenue Fund 32,349,605 3,001,889 1,493,194 33,858,300 1,182,594 Sub-total of Enterprise Fund Debt 48,625,977 5,497,313 2,729,465 51,393,825 2,397,122 Grand Totals of Long-Term Debt $ 69,851,649 $ 10,134,741 $ 10,498,669 $ 69,487,721 $ 4,245,659 The City does not receive reimbursement for debt service from any other governmental units. The City does not have any special assessment debt or defeased bonds as of June 30, 2022. In previous years, the City has used General Fund Revenues to liquidate Net Pension and Net OPEB Liabilities in the General Fund. D. Debt Service Requirements The following are the debt service requirements to maturity on the City's general obligation bonds and revenue bonds. Governmental Activities: 2019 General Obligation Bonds 2021 General Obligation Bonds Total General Fiscal Fund Debt Service Year Principal Interest Principal Interest 2023 $ 349,632 $ 109,842 $ 147,156 $ 22,830 $ 629,460 2024 356,556 101,565 149,662 22,830 630,613 2025 364,092 92,569 152,211 17,774 626,646 2026 371,544 83,664 154,804 15,182 625,194 2027 379,140 74,576 157,440 12,545 623,701 2028 386,760 65,478 160,122 9,864 622,224 2029 2,485,176 55,843 162,849 7,136 2,711,004 2030 - - 165,622 4,363 169,985 2031 - - 168,443 1,542 169,985 Total $ 4,692,900 $ 583,537 $ 1,418,309 $ 114,066 $ 6,808,812 85 169

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Business-type Activities Water, Wastewater and Electric Revenue Funds 2009 Municipal Revenue 2010 Municipal Revenue 2011 Municipal Revenue Bonds (Wastewater) Bonds (Water) Bonds (Wastewater) Fiscal Year Principal Interest Principal Interest Principal Interest 2023 $ 288,702 $ 58,346 $ 130,228 $ 31,061 $ 41,783 $ 16,341 2024 294,505 52,543 133,649 27,640 43,302 14,823 2025 300,424 46,624 137,160 24,129 44,875 13,250 2026 306,463 40,585 140,764 20,526 46,505 11,619 2027 312,623 34,425 144,461 16,828 48,195 9,930 2028 318,906 28,142 148,257 13,033 49,946 8,178 2029 325,316 21,732 152,151 9,138 51,761 6,364 2030 331,855 15,193 156,148 5,141 53,642 4,483 2031 338,526 8,522 79,607 1,039 55,592 2,534 2032 171,807 1,718 - - 28,548 514 Total $ 2,989,127 $ 307,830 $ 1,222,425 $ 148,535 $ 464,149 $ 88,036 (Continued) 86 170

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Business-type Activities (Continued) Water, Wastewater and Electric Revenue Funds 2013 Revenue Bonds 2018 Municipal Revenue 2018 Municipal Revenue 2020 Municipal Revenue 2018 Revenue Bonds Total Fiscal Water and Wastewater Loan (Wastewater) Loan (Water) Loan (Wastewater) Electric Business-Type Year Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Activities 2023 $ 395,000 $ 112,369 $ 41,011 $ 16,224 $ 182,067 $ 44,168 $ 15,934 $ 7,322 $ 865,000 $ 511,325 $ 2,756,881 2024 410,000 100,294 41,835 15,400 185,726 41,570 32,347 14,164 910,000 466,950 2,784,748 2025 215,000 90,919 42,676 14,559 189,459 38,971 32,997 13,514 955,000 420,325 2,579,882 2026 220,000 84,256 43,534 13,701 193,267 36,373 33,661 12,851 1,005,000 371,325 2,580,430 2027 225,000 77,106 44,409 12,826 197,152 33,775 34,337 12,174 1,055,000 319,825 2,578,066 2028 235,000 69,281 45,301 11,933 201,115 31,177 35,027 11,484 1,110,000 265,700 2,582,480 2029 245,000 60,269 46,212 11,023 205,157 28,579 35,731 10,780 1,160,000 214,750 2,583,963 2030 255,000 50,269 47,141 10,094 209,281 25,981 36,450 10,062 1,200,000 173,550 2,584,290 2031 265,000 39,869 48,088 9,146 213,487 23,383 37,182 9,329 1,240,000 136,950 2,508,255 2032 275,000 29,069 49,055 8,180 217,779 20,785 37,930 8,582 1,275,000 99,225 2,223,192 2033 285,000 17,869 50,041 7,194 222,156 18,187 38,692 7,820 1,315,000 60,375 2,022,333 2034 295,000 6,084 51,047 6,188 226,621 15,589 39,470 7,042 1,355,000 20,325 2,022,366 2035 - - 52,073 5,162 231,176 12,990 40,263 6,249 - - 347,912 2036 - - 53,120 4,115 235,823 10,392 41,072 5,439 - - 349,961 2037 - - 54,187 3,047 240,563 7,794 41,898 4,614 - - 352,103 2038 - - 55,276 1,958 245,398 5,196 42,740 3,772 - - 354,340 2039 - - 56,388 847 250,332 2,598 43,599 2,912 - - 356,677 2040 - - - - - - 44,475 2,036 - - 46,511 2041 - - - - - - 45,369 1,142 - - 46,511 2042 - - - - - - 23,026 230 - - 23,256 Total $ 3,320,000 $ 737,654 $ 821,394 $ 151,596 $ 3,646,559 $ 397,508 $ 732,200 $ 151,519 $ 13,445,000 $ 3,060,625 $31,684,157 87 171

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. E. Certain Asset Retirement Obligation The City recognized an Asset Retirement Obligation (ARO) related to an electric generating facility. An ARO is a legally enforceable liability associated with the retirement of a tangible asset. The McKee Run Generating Station is an electric generating facility owned and operated by the City since 1972 and was shut down on May 31, 2021. A legal obligation exists for the City to perform future retirement activities for the decommissioning of the McKee Run Generating Station, as the site contains hazardous and other materials that require special handling, based upon Federal Regulations and the Delaware Department of Natural Resources and Environmental Control (DNREC). The City engaged a specialist to estimate the cost of decommissioning the station, and initially in fiscal year 2020 recognized a liability of $11,915,849. This year it has been reduced to $11,618,846 due to payment of invoices in the amount of $297,003. During the 2nd quarter of fiscal year 2022, the City signed a contract with Montrose Environmental as a decommissioning consultant. Since the contract execution, the consultant has worked with City of Dover and DNREC members in preparing the sampling and analysis plans, collection of samples of soil, groundwater, and the preparation of surveys for asbestos and other hazardous materials. Montrose continues to assist with the City’s participation in the Voluntary Cleanup Program (VCP) with DNREC. Based on the extended timeline for sampling analysis and the substantial comments and terms received from DNREC on the Conceptual Site Model (CSM) and the Sample and Analysis Plan (SAP), the Remedial Action Report and Workplan have been delayed. The anticipated request for proposals for demolition services will be released in fiscal year 2023. 7. RESTRICTED NET POSITION In the government-wide financial statements, the restricted net position of the governmental activities and business type activities are as follows: Governmental Activities Grants-capital projects This represents the State DOT grant $ 114,487 reported in the non-major special revenue funds. Grants-public safety These represent the Police grants, ERLSP 137,583 grant and Substance Abuse Prevention grant in the special revenue type funds. Other Purposes These represent all other funds reported in 4,423,112 the special revenue type, except the grants reserved for capital construction and public safety. Also included is the interest from an endowment from Mary Elizabeth Paton and the verizon reserve. Total Restricted Net Position $ 4,675,182 Business Type Activities Net restricted position for construction purposes - expendable Water and Wastewater Restrictions on investments $ 8,464,746 imposed by bond covenants Electric Restrictions on investments 61,891,040 imposed by bond covenants Total Restricted Net Position $ 70,355,786 88 172

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 8. FUND BALANCES & NET POSITION In the governmental fund financial statements, fund balances are reported based on a hierarchy of constraints on the specific purposes for which the funds can be spent. Non-spendable fund balances represent items that are not in spendable form and not expected to be converted to cash. This criterion also applies to the corpus of permanent funds, which would include the Mary Elizabeth Paton library endowment. Restricted fund balances represent amounts that have externally imposed restrictions by creditors, grantors, enabling legislation or laws and regulations of other governments. The fund balances of the City’s grant funds fall into this category, as well as a couple of accounts that have contractual restrictions imposed by a third party. Committed fund balances represent amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of City Council through a motion or an adopted city ordinance. These amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action to which it previously committed the amount. Assigned fund balances represent amounts constrained by the City’s intent to be used for specific purposes. These amounts represent the City’s capital asset appropriations. The constraints placed on assigned fund balances are implemented through internal processes such as a budget ordinance or motion of City Council. Therefore, assigned fund balances do not have the same restrictive nature as a restricted fund balance. Unassigned fund balance is the residual amount that has not met the criteria for the previously mentioned classifications. The unassigned fund balance is available for expenditures as they are incurred. The General Fund is the only fund that reports a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. 89 173

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. The composition of the City fund balances as of June 30, 2022, follows: Other General Governmental Fund Funds Total Fund balances: Nonspendable: Inventory & Prepaids $ 353,799 $ 4,692 $ 358,491 Patronage Stock 16,594 - 16,594 Library Endowment 5,000 - 5,000 Subtotal Nonspendable: 375,393 4,692 380,085 Restricted for: Library Endowment Interest 2,604 - 2,604 Verizon cable franchise 64,814 - 64,814 Highway resurfacing - 114,487 114,487 CDBG - 1,141 1,141 ARPA Grant - 4,165,545 4,165,545 Substance Abuse Prevention - 56,779 56,779 Library Grants - 188,274 188,274 Police Grants - 76,846 76,846 Subtotal Restricted for: 67,418 4,603,072 4,670,490 Committed to: Contingency 737,380 - 737,380 Parkland 1,425,937 - 1,425,937 Subtotal Committed to: 2,163,317 - 2,163,317 Assigned to: Capital Projects 7,809,060 - 7,809,060 Subtotal Assigned to: 7,809,060 - 7,809,060 Unassigned 12,587,231 - 12,587,231 Total fund balances $ 23,002,419 $ 4,607,764 $ 27,610,183 As noted in the Introductory section of this report (page 8), the City has established the “City of Dover, Delaware Financial Policies” booklet, which is a standardized set of principles managed by the Finance Department to ensure that the City follows the minimum fund balance policies. 9. PROPERTY TAXES Property taxes are levied under the authority of the City Charter on all real property located within the City limits. The City Assessor oversees the property assessments, and the City Council levies the property tax rate. The following table provides important dates with reference to property taxes. Beginning of fiscal year for taxes July 1 Tax rate levied 2nd Council Meeting in June Taxes billed July 1 Taxes due and payable at par July 31 Penalty of one and one-half percent starts August 1 Lien established on property for property taxes July 1 Tax sales of property with unpaid taxes 2 years from date of billing As of June 30, 2022, there were no material delinquent taxes. 90 174

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 10.INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances as of June 30, 2022, follows: A. Due to/from other funds – Charges and Allocations Receivable Fund Payable Fund Amount General Fund Non-Major Governmental Funds $ 539,378 Water Fund 46,868 Wastewater Fund 52,600 Electric Revenue Fund 104,775 743,621 Water Fund General Fund 24 Wastewater Fund 114,033 114,057 Wastewater Fund General Fund 24 Total $ 857,702 B. Temporary Advances Receivable Fund Payable Fund Amount General Fund CDBG Fund $ 40,000 The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. C. Interfund Transfers Transfers In Non-Major Electric Transfers Out General Fund Governmental Funds Revenue Fund Total Non-Major Governmental Funds $ 5,745,150 $ - $ - $ 5,745,150 Water Fund 500,000 - - 500,000 Wastewater Fund 500,000 - - 500,000 Electric Revenue Fund 11,000,000 - - 11,000,000 General Fund - 194,515 25,000 219,515 Total $ 17,745,150 $ 194,515 $ 25,000 $ 17,964,665 Transfers are generally made to provide operating capital or debt service subsidies to the receiving fund in accordance with City policy. 91 175

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 11.MATERIAL COMMITMENTS A. The City entered into a long-term Renewable Generation Unit Power Purchase Agreement with FPS Raceway Solar, LLC effective August 24, 2020. FPS Raceway Solar, LLC will supply certain energy, REC's and capacity generated by the electric generation facility to be located in Harrington, DE. Once the project is completed it will provide power to the City of Dover for a period of 25 years. B. The City is the guarantor on two loans in the original amounts of $635,300 & $757,900 for the Dover Fire Department: a separate entity from the City of Dover. The City also budgets financial contributions to assist the volunteer fire company with the acquisition of firefighting apparatus and maintenance of the building and other necessary equipment. The current fiscal year includes $83,347 in expenditures for Squad #1 a 2020 Pierce enforcer rescue engine, and $77,672 for Engine No. 5. C. The City entered a three-year management contract with The Energy Authority effective July 1, 2016, to provide a market-based approach for power supply management. The City has extended the contract through June 30, 2023. The Energy Authority manages energy purchases and utilizes the City’s generating assets to provide a level of rate stability and to mitigate the effects of volatility in the energy markets. D. The City entered a management contract with North American Energy Services (NAES) to operate and maintain the Van Sant plant of the electric utility in August 2022. NAES has been under contract with the City as the operator of the generating assets since May 2006. Previous contracts included the operation and maintenance of two generating stations, McKee Run and Van Sant. In May 2021 McKee Run was retired after which a request for proposals was circulated for the Operation and Maintenance of the Van Sant Plant only through 2027. The City has incorporated the budgets and financial activity of the generating asset into its procedures used for all other divisions of the electric utility. These procedures include a line-item budget and adherence to City policies. All personnel are employed by NAES, and personnel costs are billed to the City bi-weekly. Any capital improvements are included in the City’s capital improvement plan. The contract also provides for a monthly management fee and a performance incentive based on budget and plant performance. The cost estimate for the annual management fee and incentives totals $145,561 per year and is included in the plant operating budget. E. The City is the guarantor on two $1.3 million loans held by the Downtown Dover Partnership. The loans are secured by two parcels in the downtown business district that the Downtown Dover Partnership is marketing for its redevelopment initiative. The principal and interest on both loans is paid monthly from rental receipts the Partnership receives from its current tenants on the properties. F. There are no significant encumbered amounts where the resources have already been restricted. 12.FORWARD CONTRACTS Pursuant to the July 1, 2011 Energy Management Agreement between the City and The Energy Authority (TEA), the City has formed an Executive Risk Management Committee (ERMC). The ERMC has adopted a Governing Policy for Energy Commodity Risk Management (Policy) aimed at addressing the energy commodity risks and the Procedures and Controls Manual for Energy Commodity Risk Management (Procedures Manual). The Procedures Manual further describes the risk management philosophy under which TEA, the City’s designated provider of energy risk management services conducts its activities. The Procedures Manual authorizes TEA to enter into physical forward transactions which shall be governed by 92 176

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Edison Electric Institute (EEI), North American Energy Standards Board (NAESB), or similar agreements with counterparties approved by the City. These agreements will enable the City to hedge the forward price of purchased power, natural gas or fuel oil for delivery as needed to meet its load requirements. No speculative transactions for volumes in excess of forecasted power and fuel needs are permitted. TEA also provides advisory services to the City to determine the extent to which financial hedges would mitigate market and credit risk to the benefit of the City. These contracts meet the definition of a derivative instrument as defined by GASB Statement No. 53, Accounting and Reporting for Derivative Instruments (GASB 53). However, these contracts meet the normal purchases and sales exemption of GASB 53 as the City intends to use the physical commodity in its normal utility operations to supply energy to its customers. Accordingly, these contracts are not within the scope of GASB 53 and are not recorded on the City’s Statement of Net Position. Under the Procedures manual the City will not extend credit to any potential counterparty that has a credit rating below investment grade (defined as BBB as rated by S&P Global Ratings or Baa2 as rated by Moody’s Investors Service). Any counterparty that is unrated by either S&P or Moody’s must be approved by the ERMC prior to the execution of any trading activities. Credit risk is mitigated using collateral thresholds, credit limits, maximum nominal exposure and term limitations. A collateral threshold is the amount of unsecured credit granted to the counterparty. Unsecured credit exposure includes amounts owed by the counterparty, whether billed or not, and the marked-to-market differences in value of any collateral held. Any net exposure above the collateral threshold will require the posting of collateral by the counterparty. Collateral thresholds, term limitations and credit exposure limits are subject to maximums as established by the ERMC. 93 177

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. A summary of the contracts outstanding as of June 30, 2022 are as follows: Counterparty Credit Risk (in 1,000’s) Maximum Counterparty Amount of Loss Counterparty Line Counterparty or Guarantor due to Credit Collateral Description Threshold Availability Credit Rating Risk w/o Respect to Collateral ($) AEP Energy Partners, Inc. BBB $10,000 $10,231 ($231) No Collateral if exposure under specified threshold Barclays Bank, PLC A $15,000 $15,000 $0 No Collateral if exposure under specified threshold BP Energy Company A- $15,000 $15,000 $0 No Collateral if exposure under specified threshold Calpine Energy Services, L.P. B+ No threshold ($9,084) $9,084 No Specified threshold $10,000 guaranty from Citigroup Global Markets Holdings, Citigroup Energy, Inc. BBB+ $7,000 $7,000 $0 threshold is $7,000 Conectiv Energy Supply, Inc. NR No threshold $0 $0 No Defined threshold Threshold is $18 million unless guarantor's credit rating falls below EDF Trading North America, LLC BBB- $18,000 $18,000 $0 Baa3 Constellation Energy Services, Inc. BBB $30,000 $30,000 $0 No collateral if exposure under specified threshold Macquarie Energy, LLC A $15,000 $15,344 ($344) Up to $15,000 is guaranteed by Macquarie Bank Limited Unlimited guaranty from Morgan Stanley, threshold set by table in Morgan Stanley Capital Group Inc. A- $15,000 $10,619 $4,381 contract $10,000 guaranty from NextEra Energy Capital Holdings, $17,700 NextEra Energy Marketing, LLC. BBB+ $10,000 ($10,450) $20,450 collateral held for exposures above threshold NJR Energy Services Company No threshold $0 $0 No Specified threshold PSEG Energy Resources & Trade, LLC BBB $5,000 $5,000 $0 $5,000 guaranty from PSEG Power LLC Sequent Energy Management, L.P. BBB $5,000 $5,000 $0 Unlimited guaranty from Williams Co., threshold is $5,000 94 178

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 13.INSURANCE A. Health Insurance – State of Delaware The City participates in the State of Delaware Health Insurance Program. The State offers four health plan options. The administration of benefits is coordinated with Aetna and Highmark Delaware. Pre- determined premiums consisting of City and employee contributions are subsequently paid to the State of Delaware. B. Workers’ Compensation Fund – Self-Insurance On July 1, 1990, the City began self-insuring its Workers’ Compensation insurance. For this purpose, the City has established a separate fund. Claims are processed and administered by a third-party administrator. The City manages the revenue and expenditures in this fund and maintains all records. The City maintains a fund balance reserve to cover any claims incurred but not reported. AMI Risk Consultants completed an updated valuation in fiscal year 2019. As of June 30, 2022, $182,825 is reserved for open claims in this fund. An appropriate umbrella policy for the excess coverage has been purchased and is in effect as of June 30, 2022. Workers’ Compensation activity is recorded in the Workers’ Compensation Fund as follows: 2022 2021 Claims payable, beginning of year $ 288,538 $ 449,515 Claims incurred 274,337 96,278 Payment of claims (380,050) (257,255) Claims payable, end of year $ 182,825 $ 288,538 C. Other than Health or Workers’ Compensation Insurance The City purchases commercial insurance policies to cover risks not insured through self-insurance funds. The City has designated a contingency account to provide for uninsured losses (See Note 8). There have been no significant reductions or settlements exceeding coverage in the past five fiscal years. 14.COMPENSATED ABSENCES The City grants a specific number of vacation days with pay to its employees. Upon termination or retirement, an employee is paid for accumulated vacation days. The City also grants one paid sick day per month to all employees, except for employees covered by the International Brotherhood of Electric Workers (IBEW) contract. The IBEW employees are granted eleven sick days per year. The City of Dover follows a terminal leave policy which varies with each of the four labor unions, as well as the non-bargaining group. The maximum accumulated sick days paid upon retirement is 150 days for 95 179

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. 25 years of service. No accrued sick leave is paid when an employee is terminated. In the government- wide and proprietary fund financial statements, unpaid compensated absences are recorded as a liability as the vested employees' benefits accrue, to the extent it is probable that the employee will be paid for comp time, sick and vacation benefits at retirement. In governmental funds, compensated absences are recorded as expenditures as payments become due; accordingly, no liability is recorded in the Governmental Funds statement. Typically, the General Fund has been used in prior years to liquidate the liability for compensated absences recorded in governmental activities. 15.OTHER POST-EMPLOYMENT BENEFITS Plan Description On May 11, 2009, the City of Dover Other Post-Employment Benefits Trust (OPEB Trust) was established pursuant to Section 115 of the Internal Revenue Code. Policy for and management of the OPEB benefits provided to retirees are the responsibility of the City of Dover. No stand-alone financial report is issued for the OPEB Trust. The City of Dover OPEB Plan is a post-retirement employee benefit program established for the purpose of funding retiree health care as provided for in Chapter 80, Article IV, Division 5 of the Code of Ordinances. The OPEB Plan is a single employer defined benefit plan. The OPEB Plan provides retirement medical coverage to pensioners and their eligible dependents in the City of Dover defined benefit and defined contribution pension plans as well as the State of Delaware’s Police defined benefit plan. Plan Administration Management of the plan investments are fully vested with the City of Dover OPEB Board as established in the City Code, which consists of five members - two Council members appointed by the Council President, the City Manager, the Controller/Treasurer, and the Human Resources Director. The City Manager, the Controller/Treasurer, and the Human Resources Director serve as ex-officio members. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. The City purchases health insurance from the State of Delaware through a cooperative purchasing arrangement permitted by State Code. The State Office of Benefits provides the City with the medical insurance premiums by type of coverage and carrier during the budget cycle each year. The City also pays a five percent risk premium and contract administration fee of $2.70 for each contract in addition to the premium. Any premiums paid over or under the benefits paid out for City employees revert to the State. Membership of the plan consisted of the following on June 30, 2022: Retirees and beneficiaries receiving benefits 316 Terminated plan members entitled to but not yet receiving the benefits 17 Active plan members 330 Total 656 96 180

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Substantially all City employees become eligible for post-retirement benefits if they reach retirement age while working for the City. The costs of providing these benefits are shared between the City and the retired employee. Employee Benefits and Contributions The City maintains contracts with each of the following collective bargaining units. • The International Brotherhood of Electric Workers (IBEW) union contract period is July 1, 2020, through June 30, 2023. • The American Federation of State, County, and Municipal Employees (AFSCME), Council 81 contract period is July 1, 2020, through June 30, 2023. • The Fraternal Order of Police Lodge #15 (FOP) union contract period is July 1, 2021, through June 30, 2024. • The Dover Organization of Employees (DOE) union contract period is July 1, 2021, through June 30, 2024. The eligibility provisions for early retirement are as follows: SUMMARY OF PRINCIPAL PLAN PROVISIONS Benefits for Civilians: A. Covered Groups: Full-time DOE (formerly IUE), IBEW, AFSCME and non-union employees and their dependents are covered. B. Eligibility: Satisfaction of either of the following eligibility requirements: 1. Unreduced Retirement: Attainment of the earlier of the following conditions: a. Later of attainment of age 65 and completion of 10 years of service. b. If hired prior to May 1, 1994, later of attainment of age 50 and completion of 20 years of service. c. If hired prior to May 1, 1994, completion of 25 years of service. d. If hired on or after May 1, 1994, later of attainment of age 55 and completion of 80 points (age plus service). 2. Reduced Retirement: For DOE, AFSCME and non-union members hired prior to July 1, 1994, attainment of age 55 and completion of 10 years of service. Other members who meet this condition have the option to pay 100% of the premiums for coverage. 3. Vested Termination: For DOE, AFSCME and non-union members hired prior to July 1, 1994, completion of 10 years of service. Coverage commences upon attainment of age 65. Coverage is not available to other members. 4. Active Death: Surviving spouses are eligible for 50% of monthly payment of members eligible or not yet eligible for an unreduced pension upon death or for DOE and non-union members hired prior to July 1, 1994, if member completed 10 years of service. (Continued) 97 181

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. (Continued) SUMMARY OF PRINCIPAL PLAN PROVISIONS C. Premium Cost Sharing: Cost-sharing varies by employee group, date of retirement and/or date of hire as follows: 1. Non-Union Employees: a. None if retired prior to July 1, 1991 b. 0% for individual coverage and 25% for spouse coverage if retired on or after July 1, 1991, and prior to July 1, 2012 c. 15% for individual and spouse coverage if retired on or after July 1, 2012 2. DOE Employees: a. None if retired prior to September 1, 1991 b. 0% for individual coverage and 25% for spouse coverage if retired on or after September 1, 1991, and prior to June 1, 2013 c. 15% for individual and spouse coverage if hired prior to December 22, 2015, upon direct retirement with an unreduced pension d. 20% for individual coverage if hired on or after December 22, 2015, upon direct retirement with an unreduced pension. The retiree will have the option to purchase dependent coverage under the City’s group rate plan at full cost to the employee/retiree. 3. IBEW Employees: a. 0% for individual coverage and 25% for spouse coverage if hired prior July 1, 1986 b. 0% for individual coverage and 100% for spouse coverage if hired on or after July 1, 1986, and prior to July 1, 2014 c. 20% for individual coverage and 100% for spouse coverage if hired on or after July 1, 2014 4. AFSCME Employees: a. 0% for individual coverage and 25% for spouse coverage if retire prior to July 1, 2015 b. 15% for individual and spouse coverage if hired prior to May 20, 2014, and retire on or after July 1, 2015 c. 20% for individual coverage and 100% for spouse coverage if hired on or after May 20, 2014 D. Benefit Duration: Retiree coverage is provided for lifetime. Spouse coverage is provided for the spouse’s lifetime. E. Medicare Part B Reimbursement: Eligible retirees receive reimbursement of the Medicare Part B premium. The Medicare Part B standard premium was $170.10 for 2022; for 2021, the standard premium was $148.50. Spouses are not eligible for the reimbursement. Eligible retirees are: 1. Non-union and AFSCME employees who were hired prior to July 28, 2009. 2. IBEW employees who retired prior to July 1, 2009. 3. DOE employees who retired prior to January 31, 2010. 98 182

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Benefits for Police Officers: A. Covered Groups: Full-time FOP employees and their dependents are covered. Only provisions for members hired on or after September 1, 1982, are shown. B. Eligibility: Satisfaction of either of the following eligibility requirements: 1. Unreduced Retirement: Attainment of the earlier of the following conditions: a. Later of attainment of age 62 and completion of 10 years of service. b. Completion of 20 years of service. c. Later of completion of 10 years of service and 75 points (age plus service). 2. Reduced Retirement: Not applicable. 3. Vested Termination: None. 4. Active Death: Surviving spouses of members eligible for an unreduced pension upon death. C. Premium Cost Sharing: 1. None if retired prior to July 1, 1991 2. 0% for individual coverage and 25% for spouse coverage if retired on or after July 1, 1991, and prior to July 1, 2012 3. 15% for individual and spouse coverage if retire on or after July 1, 2012. 4. Employees hired on or after October 9, 2015, contribute 20% for individual coverage. The retiree will have the option to purchase dependent coverage under the City’s group rate plan at full cost to the employee/retiree. D. Benefit Duration: Retiree coverage is provided for lifetime. Spouse coverage is provided for the spouse’s lifetime. E. Medicare Part B Reimbursement: Eligible retirees receive reimbursement of the Medicare Part B premium. The Medicare Part B standard premium was $170.10 for 2022; for 2021, the standard premium was $148.50. Spouses are not eligible for the reimbursement. Eligible retirees are members who retired prior to September 30, 2006. Employer Contributions: The City of Dover funds the other post-employment benefits for current retirees on a pay-as-you-go basis along with funding for future benefits at a rate that is approved in the annual budget, but not actuarially determined. Additional funding has also been provided on an ad hoc basis. The employer contributions towards retiree health care premiums this fiscal year are as follows: General Government $ 2,779,092 Water and Wastewater Fund 319,967 Electric Revenue Fund 943,226 Total Contributions $ 4,042,285 99 183

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Transactions are recorded in the OPEB Trust for the payment of administrative and investment expenses and financed through investment earnings. City appropriations and other employer contributions for health care are recorded in the OPEB Trust. The OPEB Board of Trustees is responsible for the management of the trust investments. Contributions The contribution rates for the employer are established annually by the budgeting process of the City. Those rates include an employer contribution based on projected pay-as-you-go financing requirements as a percent of premiums, with an additional amount to prefund benefits, which is not actuarially determined. For the year ended June 30, 2022, the City’s average contribution rate was 19.9% of covered payroll of $20,249,554. The components of the Net OPEB liability of the City on June 30, 2022, are as follows: Other Post Employment Benefits Fund Changes in Net OPEB Liability Increase Total (Decrease) OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Changes in Net OPEB Liability (a) (b) (a) - (b) Balances as of June 30, 2021 $ 62,715,927 $ 56,171,225 $ 6,544,702 Changes for the year: Service cost 1,118,361 - 1,118,361 Interest 4,056,371 - 4,056,371 Differences between expected and actual exp (2,762,174) - (2,762,174) Changes in assumptions (3,523,774) - (3,523,774) Benefit payments (2,902,867) (2,902,867) - Employer contributions - 4,042,285 (4,042,285) Net investment loss - (8,960,325) 8,960,325 Trust administrative expenses - (7,500) 7,500 Balances as of June 30, 2022 $ 58,701,844 $ 48,342,818 $ 10,359,026 Plan Fiduciary Net Position as % of total OPEB Liability 82.4% Rate of return. For the year ended June 30, 2022, the annual money-weighted rate of return on investments, net of investment expense, was (16.04)%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts invested. 100 184

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Actuarial Methods and Significant Assumptions The total OPEB liability was determined by an actuarial valuation as of June 30, 2022, with liabilities as of July 1, 2021, based on an actuarial date of July 1, 2021, projected to the June 30, 2022, measurement date on a “no loss / no gain” basis, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Actuarial cost method Entry Age Normal Level % of Salary Amortization method Level Dollars Amortization period 26 years Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 7.0% Discount rate 7.0% Inflation 2.5% per year included in payroll growth Healthcare cost trend rates Pre-65 Medical / Rx Initial rate of 7.5% decreasing by 0.5% annually to an ultimate rate of 4.5% Post-65 Medical / Rx Initial rate of 7.5% decreasing by 0.5% annually to an ultimate rate of 4.5% Mortality Total Dataset Headcount Weighted Mortality Table fully generational using scale MP-2020 a. Non-Police: SOA Pub-2010 General b. Police: SOA Pub-2010 Public Safety c. Surviving Spouses: SOA Pub-2010 Contingent Survivors 101 185

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Changes in Actuarial Assumptions or Methods The long term expected rate of return on OPEB plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2022, are summarized in the following table: OPEB Trust Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash & Short-Term Bond 9.00% 2.66% - 3.47% Fixed Income 22.00% 2.27% - 6.37% Equity 64.00% 7.29% - 11.11% Real Estate 5.00% 8.18% Long-Term Expected Rate of Return 7.00% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. Discount Rate The discount rate used to measure the total OPEB liability was 7.0%. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability as of June 30, 2022, calculated using the discount rate of 7.00%, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.00%) or 1 percentage point higher (8.00%) than the current rate. Other Post-Employment Benefits 1% Current 1% Decrease Discount Rate Increase 6.00% 7.00% 8.00% Net OPEB liability $ 17,770,364 $ 10,359,025 $ 4,236,784 102 186

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate The following presents the net OPEB liability as of June 30, 2022, calculated using the health care trend rates assumed and what it would be using 1% higher and 1% lower health care trend rates: Health Care Trend Rates Assumptions 1% Current 1% Decrease Trend Rate Increase Net OPEB liability $ 3,437,004 $ 10,359,025 $ 18,813,995 OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2022, the City recognized OPEB expense (credit) of ($2,583,923) as calculated in the following table: OPEB Expense Service cost $ 1,118,361 Interest 4,056,371 OPEB plan administrative expenses 7,500 Projected earnings on OPEB plan investments (3,687,338) Current period recognition of deferred outflows/(inflows) of resources Differences between expected and actual experience (4,848,988) Net difference between projected and actual earnings on plan investments 626,343 Changes of assumptions 143,828 Total OPEB Credit $ (2,583,923) On June 30, 2022, the City reported deferred outflows (inflows) of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows Deferred Outflows (Inflows) of Resources Differences between expected and actual experience $ - $ (8,365,585) Changes in assumptions 1,924,366 (2,819,019) Net difference between projected and actual earnings in 4,394,672 - OPEB plan investments Total Deferred Outflows (Inflows) of Resources $ 6,319,038 $ (11,184,605) 103 187

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Year Ending June 30: 2023 $ (2,776,360) 2024 (2,035,326) 2025 (1,326,223) 2026 1,272,343 Separate Other Postemployment Benefit fund financial statements have not been issued; accordingly, they are presented separately, as follows: The City of Dover, Delaware Schedule of Other Post-Employment Benefits Trust Fund Net Position June 30, 2022 Other Post-Employment Benefit Trust Fund Assets: Cash and cash equivalents $ 3,162,308 Investments at Fair Value - Mutual Funds 45,629,719 Total Assets 48,792,027 Liabilities: Accounts Payable 449,209 Total Liabilities 449,209 Net Position: Net Position Restricted for Retiree Health Benefits $ 48,342,818 104 188

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. The City of Dover, Delaware Schedule of Changes in Other Post-Employment Benefits Trust Fund Net Position June 30, 2022 Other Post-Employment Benefit Trust Fund Additions: Net Investment Income $ (8,960,325) City's Contribution-Payroll Based 757,785 City's Contribution-Lump Sum 3,284,500 Total Additions (4,918,040) Deductions: Benefit Payments 2,902,867 General Administration 7,500 Total Deductions 2,910,367 Change in Net Position Net Position - Beginning 56,171,225 Net Position - Ending $ 48,342,818 16.DEFERRED COMPENSATION PLAN The City has a self-directed 457 Deferred Compensation Plan for its employee benefit options. The plan was administered by the International City Management Retirement Corporation (RC). The assets are held in the name of each participant with the ICMA (International City/County Management Associations) Retirement Trust. In the Spring of 2022, ICMA changed its name to Mission Square. Employees are eligible to make contributions to the plan not to exceed the ceiling set by federal regulations. The City later added an alternative investment option for the Deferred Compensation Plan with Nationwide Retirement Solutions. The City offers a 457 Deferred Compensation Plan to employees as their pension plan in lieu of participation in the General Employee Pension Plan. At that time 41 employees opted out of the Defined Benefit Pension Plan and enrolled in the Deferred Compensation Plan. The ICMA 457 Deferred Compensation Plan has assets of $11,019,694 (market value) as of June 30, 2022, with 170 active employees contributing $637,287. The Nationwide plan has assets of $3,751,026 (market value) as of June 30, 2022, with 10 active employees contributing $67,329. Quarterly statements are mailed to each participant by the plan administrators. All administration fees are borne by the participants. All contributions are 100% vested upon election of the plan. Employees are eligible to withdraw or rollover to another plan upon separation of service. Withdrawals prior to age 59½ could be subject to penalty. Employees who participate in the defined benefit plan are also eligible for the 457 Deferred Compensation Plan. No matching employer contribution is made to the 457 Deferred Compensation Plan. As of June 30, 2022, there are 383 employees eligible to enroll in the 457 Deferred Compensation Plan. 105 189

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. All amounts of compensation deferred under the plans, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the individuals who participate in the deferred compensation plan and are not subject to the claims of the City’s general creditors. 17.RETIREMENT PLANS The City participates and/or manages four retirement plans on behalf of its employees. Three of which are defined benefit plans, and one is a defined contribution plan. Two of the defined benefit plans are closed to new hires. All full-time employees are required to enroll in a retirement plan. During fiscal year 2022, the total wages were $25.6 million. The number of employees eligible for pension benefits as of June 30, 2022, is 383. Following is the total of the City of Dover’s pension liabilities, pension assets, deferred outflows of resources and deferred inflows of resources related to pensions, and the pension expense and expenditures for the fiscal year ended June 30, 2022: 2022 Police General DPERS Total Pension Net Position $ 14,803,746 $ 48,076,817 N/A $ 62,880,563 Pension Liabilities 17,552,192 67,018,229 N/A 84,570,421 Net Pension (Liabilities)/Asset (2,748,446) (18,941,412) $ 11,224,983 (10,464,875) Deferred Outflows of Resources 1,314,366 4,314,906 2,846,727 8,475,999 Deferred Inflows of Resources - - (10,882,499) (10,882,499) Pension Expense 44,737 1,720,559 1,235,836 3,001,132 A. Defined Contribution Plan Effective July 1, 2000, the City implemented an IRC 401a Money Purchase Plan “401a Plan,” a self-directed defined contribution plan, as an alternative for pension benefits. The contribution and funding requirements of the plan are both established and amended by the City. The plan is administered by the MissionSquare Retirement Corporation. The assets are held in the name of each participant with the MissionSquare Retirement Trust. Quarterly statements are mailed to each participant by MissionSquare. All administration fees are borne by the participants. The Dover Organization of Employees (DOE) union contract renewed effective July 1, 2021, through June 30, 2024. The contract’s mandatory minimum employee contribution (MMEC) as well as the City’s minimum matching contribution was unchanged and is as follows: Effective Date Minimum Employee Contribution City’s Match (Up to) March 27, 2016 4% 7% July 1, 2016 5% 8% July 1, 2017 6% 9% 106 190

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. All other employees, except for FOP members, must contribute 3% of pensionable wages into the 401a Plan. The City matches the 3% contribution into the 401a Plan. The City provides an additional dollar-for- dollar match into the 401a Plan if the employee contributes to their 457 Plan, up to a maximum of 3% for a total matching contribution not to exceed 6%. (See note 16 – Deferred Compensation Plan). The 401a Plan and 457 Plan contributions are calculated on base wages plus on-call pay and pay adjustments. All full-time regular employees are eligible, excluding law enforcement personnel. Personnel that have elected the defined contribution plan are not eligible for the defined benefit plan. All contributions are 100% vested upon election of the plan. To be eligible for benefit payments, the participant must meet the same eligibility requirements as the participants in the defined benefit plan. Employees are eligible to withdraw or rollover to another plan the employer and employee benefits upon separation of service. Withdrawals prior to age 59 ½ could be subject to penalty. As of June 30, 2022, there were 219 full-time employees enrolled in the 401a plan. The City contributed a total of $612,576 on wages of approximately $9.5 million. Employees contributed $446,278 to the 401a Money Purchase Plan. The market value of the 401a plan assets totaled $10,268,361 as of June 30, 2022. B. Defined Benefit Plans The City participates in three defined benefit pension plans: City of Dover Police Pension Plan (closed), City of Dover General Employee Pension Plan (closed), and State of Delaware County and Municipal Police Pension Plan. The City of Dover Police Pension Plan, a single employer defined benefit plan, covers all uniformed police officers hired prior to September 1, 1982. The City of Dover General Employee Pension Plan, a single employer defined benefit plan, covers all eligible full-time permanent employees, other than uniformed police officers. The State of Delaware County and Municipal Police Pension Plan, a multi- employer cost sharing defined benefit plan, covers all uniformed police officers hired on or after September 1, 1982. The City makes employer contributions to all three plans. The City holds on-behalf of the Pension Boards of Trustees, the assets of the two single employer defined benefit plans and, accordingly, is required to prepare pension trust fund financial statements using the accrual basis of accounting. Investments are reported at fair value based on quoted market prices. Receivables and payables represent year end accruals of short-term receipts or charges. The administration of plan assets for both the Police Pension Plan and the General Employee Pension Plan is conducted by the Pension Boards as described in the subsequent disclosures. 107 191

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Separate pension fund financial statements for the City Police Pension and General Employees’ Pension Plan have not been issued; accordingly, they are presented separately, as follows: The City of Dover, Delaware Combining Schedule of Pension Trust Fund Net Position For the Year Ended June 30, 2022 Police General Pension Pension Totals Assets: Cash and cash equivalents $ 1,838,086 $ 6,307,897 $ 8,145,983 Investments at fair value - Mutual Funds 12,967,347 41,774,955 54,742,302 Total Assets 14,805,433 48,082,852 62,888,285 Liabilities: Accounts Payable 1,687 6,035 7,722 Net position held in trust for pension benefits $ 14,803,746 $ 48,076,817 $ 62,880,563 The City of Dover, Delaware Combining Schedule of Changes in Pension Trust Fund Net Position For the Year Ended June 30, 2022 Police General Pension Pension Totals Additions Net investment income $ (2,441,617) $ (7,865,542) $ (10,307,159) City's contribution - payroll based - 3,248,190 3,248,190 City's contribution - lump sum 615,200 1,234,300 1,849,500 Employee contribution - 171,257 171,257 State grants 668,521 - 668,521 Other 3,341 - 3,341 Total Additions to Net Position (1,154,555) (3,211,795) (4,366,350) Deductions Benefit payments 1,517,334 4,561,451 6,078,785 General administration 11,987 51,795 63,782 Total Deductions From Net Position 1,529,321 4,613,246 6,142,567 Change in net position (2,683,876) (7,825,041) (10,508,917) Net Position - Beginning 17,487,622 55,901,858 73,389,480 Net Position - Ending $ 14,803,746 $ 48,076,817 $ 62,880,563 108 192

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each plan are recognized when due, pursuant to formal commitments, to provide contributions. Benefits or refunds are recognized when due and payable in accordance with the terms of each plan. Investment management and consultant fees are paid from the Pension Trust Funds. All actuarial costs are paid from other City funds. City of Dover Police Pension Plan Plan Description This contributory pension plan began on January 1, 1970, under the authority of the City Code, Chapter 62, Article III, Pension Plan, Section 62-71 through 62-84. The contribution and funding requirements of the plan are established by the City and may be amended by the City Council. It is a closed plan. The last active employee retired June 29, 2006. An officer’s pension right is vested upon the completion of 15 years of continuous service. As of June 30, 2022, there are 43 retirees and beneficiaries receiving benefits. Fully vested employees who have completed 20 to 25 years of continuous service are entitled to annual benefits equal to 2.5% of their average earnings for each year of continuous service. The maximum benefit is 62.5% of average earnings. If a participant terminates after completing 15 years of service, the participant will be eligible for a deferred benefit commencing at age 60 with a benefit accrued at the date of termination. In place of this vesting, participants may elect to receive their accumulated contributions. Disability benefits are paid to a participant who is totally or partially disabled in the performance of his or her duties. The total duty-connected disability benefit is payable monthly and equal to 75% of the monthly rate of earning at the time of disability. The partial duty-connected disability benefit is the accrued benefit at the date of disability if not less than 50% of average earnings. Disability benefits cease if the participant recovers or dies. If the disabled participant reaches his normal retirement date, the benefit is reduced by one-third. Survivor’s benefits are payable monthly in an amount equal to 75% of the participant’s rate of earnings, for a duty related death. Survivor’s benefits are payable monthly in an amount not to exceed 25% of the participant’s rate of earnings, for a non-duty related death, if the participant has completed 10 years of service. If a retired participant dies, his or her spouse receives 50% of the benefit. All benefits under the plan, including survivor’s benefits, are increased 2% per annum. There have been no changes in benefits during the valuation period by City Council. Plan Administration Management of the plan investments are fully vested with the City of Dover Police Pension Board as established in the City Code, which consists of seven members – three elected by plan members, two Council members appointed by the Council President, the Chief of Police, and the City Manager. The City Controller/Treasurer serves as an ex-officio member. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. Funding Policy The City intends to continue to fund the Actuarially Determined Contribution (ADC) as provided for in the actuarial valuation. The funding may be impacted by differences in actual experience and the actuarial 109 193

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. assumptions. The employer contributions are considered by the actuaries in their determination of the ADC. The State contributes to the pension fund on behalf of the City based on 1) an allocation to the City based on a 0.25% surcharge on insurance policies issued in the state and the number of officers employed and 2) 75% matching grant for the annual cost of living increase (COLA) granted to police retirees on January 1 each year. For the fiscal year ending June 30, 2022, the State contributed $668,521. The ADC conforms to the entry age method as defined in GASB Statement No. 67/68. The City has interim valuations completed each year between the required biennial valuations to monitor the funding progress. The City’s actuary is Nyhart of Indianapolis, Indiana. The ADC is being amortized using a level dollar method. The amortization period is 3 years for the 2022 fiscal year and will decline by 1 each year until 1 year. Total contributions to the plan for the fiscal year ending June 30, 2022, were $1.3 million, which is 115% of the ADC. The ADC is based on a closed 10-year level dollar amortization of the Unfunded Actuarial Accrued Liability (UAAL). The Schedule of Changes in the Net Pension Liability, and a Schedule of Employer Contributions are presented as Required Supplementary Information (RSI) following the notes to the financial statements. Net Pension Liability The total pension liability was determined by an actuarial valuation as of July 1, 2022, with liabilities projected to the June 30, 2022, measurement date. As of June 30, 2022, the plan was 84.34% funded. The total pension liability for benefits was $17.6 million, and the fiduciary net position was $14.8 million, which resulted in a net pension liability (NPL) of $2.7 million for the primary government. There are no active officers; therefore, there is no covered payroll or ratio of the net pension liability to cover payroll. Key methods and assumptions used in calculating the total pension liability in the latest actuarial valuation, are presented below: Rate of return. For the year ended June 30, 2022, the annual money-weighted rate of return on investments, net of investment expense, was (15.21)%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts invested. Actuarial Methods and Significant Assumptions Valuation date June 30, 2022 Actuarial cost method Entry Age Method Amortization method Level Dollars Amortization period Closed Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases none, no remaining active participants Includes inflation at 2.5% Automatic Cost of living (retirees) 2.0% 110 194

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Mortality Rates Healthy Participants: PubS-2010 Public Safety Mortality Table with fully generational improvements from 2010 based on Society of Actuaries Scale MP-2021 Survivors: Pub-2010 Continuing Survivors Mortality Table with fully generational improvements from 2010 based on Society of Actuaries Scale MP-2021 Disabled PubS-2010 Public Safety Disabled Retiree Mortality Table with fully generational improvements from 2010 based on Society of Actuaries Scale MP-2021 Changes in Actuarial Assumptions or Methods The long term expected rate of return on pension plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rates of return are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2022, are summarized in the following table: Police Pension Fund Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash and Equivalents 6.00% 0.15% Fixed Income 34.00% 1.55% Real Estate 9.00% 5.19% Stocks 51.00% 6.04% Long-Term Expected Rate of Return 100.00% 6.50% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. 111 195

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Police Pension Fund Changes in Net Pension Liability Increase Total (Decrease) Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) Balances as of June 30, 2021 $ 18,137,819 $ 17,487,622 $ 650,197 Changes for the year: Service cost - - - Interest on total pension liability 1,129,645 - 1,129,645 Differences between expected and actual experience (245,905) - (245,905) Changes of assumptions 47,967 - 47,967 Benefit payments (1,517,334) (1,517,334) - Employer contributions - 1,287,062 (1,287,062) Net investment income - (2,441,617) 2,441,617 Administrative expenses - (11,987) 11,987 Balances as of June 30, 2022 $ 17,552,192 $ 14,803,746 $ 2,748,446 Discount Rate The discount rate used to measure the total pension liability was 6.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability, calculated using the discount rate of 6.50%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current rate. Police Pension Fund 1% Current 1% Decrease Discount Rate Increase 5.50% 6.50% 7.50% Net pension liability $ 4,351,612 $ 2,748,446 $ 1,372,103 112 196

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Pension Expense, Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2022, the City recognized pension credit of ($486,692) calculated in the following chart: Police Pension Expense July 1, 2021 to June 30, 2022 Interest on total pension liability $ 1,129,645 Projected earnings on pension plan investments (1,128,822) Administrative expenses 11,987 Current period recognition of deferred outflows/(inflows) of resources Changes of assumptions 47,967 Differences between projected and actual earnings on plan investments 229,865 of the total pension liability (245,905) Total Pension Cost $ 44,737 As of June 30, 2022, the City reported deferred outflows/(inflows) of resources related to pension from the following sources: Police Pension Plan Deferred Outflows of Resources Net difference between projected and actual earnings $ 1,314,366 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Police Pension Plan Fiscal Year Ending June 30: 2023 $ 241,024 2024 226,989 2025 132,266 2026 714,087 113 197

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. City of Dover General Employee Pension Plan Plan Description The City of Dover General Employee Pension Plan started on July 1, 1967, under the authority of the City Council, Municipal Code, Chapter 2, Article IV, Division 7, General Employee Pension Plan, Sections 2-321 through 2-370, and was made contributory on July 1, 1983. Employees contribute 3.5% of gross salary, exclusive of unscheduled overtime. An employee’s pension right is vested upon completion of 10 years of continuous service. As of the valuation date, June 30, 2022, the General Employee Pension Plan is comprised of the following: Retired and beneficiaries currently receiving benefits 222 Active employees Fully Vested 70 Deferred vested 16 The percentage of covered payroll which employees contribute is stated in the City Code and is considered by the actuaries in their determination of the actuarial determined contribution for service cost. For the year ended June 30, 2022, gross payroll earnings of $6.0 million were reported to and covered by this plan. An employee hired before May 1, 1994 is eligible for normal retirement benefits under this plan, when they attain the age of 65 with 10 years of continuous service. This same employee is eligible for early retirement when he/she attains the age of 50 with 20 years of continuous service or has completed 25 years of service. Employees hired on or after May 1, 1994 who attained age 55 and whose attained age plus years of continuous service is equal to or greater than 80 are eligible for early-unreduced retirement benefits under this plan. The monthly benefits are 1/50 of the average actual monthly earnings multiplied by years and months of credited service upon retirement (highest 36 consecutive months in his/her final 10 years of continuous service). The monthly benefit shall not be less than $200 per month. Benefits are paid for the lifetime of the participant. Upon the death of the participant, 50% of the payments to which the participant was or would have been entitled shall be made to their eligible survivor. An employee may also take an early-reduced retirement on any date following the attainment of age 55 and the completion of 10 years of continuous service. However, the early retirement benefit is calculated in the same manner as the normal retirement benefit, at a reduced rate of one-half percent for each month computed from the date of early retirement to age 65 years. If an employee terminated before becoming vested in the plan, they are eligible to withdraw this total contribution with interest compounded annually. Survivor's benefits are payable to eligible survivors of a participant who dies after completing 10 years of continuous service. The amount of the death benefit is equal to 50% of the retirement benefit the participant would have received had he retired the day before he died. The benefit is calculated using the normal retirement benefit formula and service at date of termination. Effective September 29, 2009, the City Council voted to close the General Employees’ Pension plan to new hires. There have been no changes in benefits during the valuation period by City Council. 114 198

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Plan Administration Management of the plan investments are fully vested with the City of Dover Employees’ Pension Board as established in the City Code, which consists of three elected by plan members, two Council members appointed by the Council President, the City Controller/Treasurer, and the City Manager. Milliman of Albany, New York provides asset management advisory and consulting services to the Board. Funding Policy The City intends to fund the actuarial determined contributions (ADC) as provided for in the actuarial valuation. The City uses the percentage of payroll determined by the actuary for its contributions. The funding may be impacted by differences in actual experience and the actuarial assumptions. The employer contributions are considered by the actuaries in their determination of the actuarial determined contribution. The City makes payroll-based contributions for active members in the plan. The Actuarially Determined Contribution is based on a closed 15-year level dollar amortization of the Unfunded Actuarial Accrued Liability (UAAL). The Schedule of Changes in the Net Pension Liability, and a Schedule of Employer Contributions are presented as Required Supplementary Information (RSI) following the notes to the financial statements. Net Pension Liability The total pension liability was determined by an actuarial valuation as of June 30, 2022, with liabilities projected to the June 30, 2022 measurement date. As of June 30, 2022, the plan was 71.74% funded. The total pension liability for benefits was $67.0 million, and the fiduciary net position was $48.1 million, which resulted in a net pension liability (NPL) of $18.9 million for the primary government. The covered payroll (annual payroll of active employees covered by the plan) was $4.6 million and the ratio of the NPL to the covered payroll was 414.56%. Rate of return. For the year ended June 30, 2022, the annual money-weighted rate of return on investments, net of investment expense, was (15.35)%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts invested. Key methods and assumptions used in calculating the total pension liability are presented in the following chart: Actuarial Methods and Significant Assumptions Valuation date June 30, 2022 Actuarial cost method Entry Age Method Amortization method Level Dollar Amortization period Closed; 15-year of the Unfunded AAL Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases 3.0% Includes inflation at 2.5% 115 199

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Mortality Rates Healthy Participants: PubG-2010 General Mortality Table with fully generational improvements from 2010 based on Society of Actuaries Scale MP-2021 Survivors: Pub-2010 Continuing Survivors Mortality Table with fully generational improvements from 2010 based on Society of Actuaries Scale MP-2021 Disabled PubNS-2010 Non-Public Safety Disabled Retiree Mortality Table with fully generational improvements from 2006 based on Society of Actuaries Scale MP-2021 Changes in Actuarial Assumptions or Methods The long-term expected rate of return on pension plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rates of return are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2022 are summarized in the following table: General Employee Pension Plan Long-Term Expected Rate of Return Long-Term Target Expected Real Asset Class Allocation* Rate of Return Cash 6.00% 0.15% Fixed Income 29.00% 1.53% Stocks 56.00% 5.93% Real Estate 9.00% 5.27% Long-Term Expected Rate of Return 100.00% 6.50% *The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are per Milliman's investment consulting practice. 116 200

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. General Employee Pension Fund Changes in Net Pension Liability Increase Total (Decrease) Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) Balances as of June 30, 2021 $ 66,024,296 $ 55,901,858 $ 10,122,438 Changes for the year: Service cost 395,049 - 395,049 Interest on total pension liability 4,169,010 - 4,169,010 Differences between expected and actual experience 878,454 - 878,454 Effect of assumptions changes or inputs 112,871 - 112,871 Benefit payments (4,561,451) (4,561,451) - Employer contributions - 4,482,490 (4,482,490) Member contributions - 171,257 (171,257) Net investment income - (7,865,542) 7,865,542 Administrative expenses - (51,795) 51,795 Balances as of June 30, 2022 $ 67,018,229 $ 48,076,817 $ 18,941,412 Discount Rate The discount rate used to measure the total pension liability was 6.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability, calculated using the discount rate of 6.50%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current rate. General Employee Pension Fund 1% Current 1% Decrease Discount Rate Increase 5.50% 6.50% 7.50% Net pension liability $ 26,720,356 $ 18,941,412 $ 12,446,409 117 201

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Pension Expense, Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2022, the City recognized pension expense of $1,720,559 as calculated in the following chart: General Employee Pension Expense July 1, 2021 to June 30, 2022 Service cost $ 395,049 Interest on total pension liability 4,169,010 Administrative expenses 51,795 Member contributions (171,257) Projected earnings on pension plan investments (3,634,937) Current period recognition of deferred outflows/(inflows) of resources Differences between expected and actual experience 439,227 Differences between projected and actual earnings on plan investments 560,287 Changes of assumptions (88,615) Total Pension Expense $ 1,720,559 As of June 30, 2022, the City reported deferred outflows/(inflows) of resources related to pension from the following sources: General Employee Pension Plan Deferred Outflows of Resources Changes in assumptions $ 56,435 Differences between expected and actual experience 439,227 Net difference between projected and actual earnings 3,819,244 Total Deferred Outflows of Resources $ 4,314,906 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: General Employee Pension Plan Fiscal Year Ending June 30: 2023 $ 1,089,307 2024 593,917 2025 331,587 2026 2,300,095 118 202

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Delaware Public Employee Retirement System - County and Municipal Police and Firefighters’ Pension Plan Plan Description and Contribution Information The City participates in the “County and Municipal Police and Firefighters’ Pension Plan” (the Plan) a cost sharing multiple-employer defined-benefit plan established in the Delaware code. The City’s uniformed police officers whose employment with the City started on or after September 1, 1982 under the authority of the City Code, Chapter 62, Article III, Pension Plan, Section 62-71 can participate in this plan. The General Assembly is responsible for setting benefits, contributions and amending plan provisions; administrative rules and regulations are adopted and maintained by the Board of Pension Trustees (the Board). The management of the Plan is the responsibility of the Board. The Board is comprised of five members appointed by the Governor and confirmed by the State Senate, plus two ex-officio members. The daily operation is the responsibility of the Office of Pensions. Although most of the assets of the plan are commingled with other Plans for investment purposes, the Plan’s assets may be used only for the payment of benefits to the members of the Plan in accordance with the terms of the Plan. The Plan’s service benefits calculation is 2.5% of final average monthly compensation multiplied by years of credited service up to 20 years, plus 3.5% of final average monthly compensation multiplied by years of service more than 20 years. For this plan, final average monthly compensation is the monthly average of the highest three consecutive years of compensation. Vesting is at five years of credited service. As of June 30, 2022, city membership in this plan is comprised of the following: Retired and beneficiaries currently receiving benefits 80 Active employees: Fully Vested 5 years 75 Non-Vested 34 The following are brief descriptions of the Plan. For a more complete description, please refer to the Delaware Public Employees’ Retirement System CAFR on the web at: https://open.omb.delaware.gov/FinancialReports/financials/FY21AnnualReport.pdf. Retirement Age 62 with 5 years of service; age plus credited service (but not less than 10 years) equals 75; or 20 years of credited service. Disability Benefits Duty – Total Disability – 75% of final average compensation plus 10% for each dependent not to exceed 25% for all dependents. Duty – Partial Disability – Calculated the same as Service Benefits, subject to minimum 50% of final average compensation. 119 203

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Non-Duty – Same as Service Benefits, total disability subject to a minimum 50% of final average monthly compensation plus 5% of each dependent not to exceed 20% for all dependents. Partial disability is subject to a minimum of 30% of final average monthly compensation. Survivor Benefits If employee is receiving a pension, then eligible survivor receives 50% of pension; if employee is active, eligible survivor receives 75% of pension the employee would have received at age 62. If the member is killed in the line of duty, the eligible survivor receives 75% of the member’s compensation. Contributions: Employer – Determined by Board of Pension Trustees. Employer contributions were 16.59%, 16.03%, and 16.84% of earnings for the Fiscal Year 2022, 2021 and 2020, respectively. The City’s contributions to the plan for years ended June 30, 2022, 2021 and 2020 were $1,375,074, $1,328,868, and $1,317,526 respectively, and were equal to the required contributions for each year. Total eligible full-time wages covered by the State plan were $8.6 million this fiscal year. Member – 7% of compensation. Basis of Presentation The DPERS financial statements are prepared on the accrual basis of accounting, whereby expenses are recorded when the liability is incurred, revenues are recorded in the accounting period in which they are earned and become measurable, and investment purchases and sales are recorded as of the related trade date. Plan member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has a legal requirement to provide contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the DPERS Plan and additions to/deductions from DPERS’s fiduciary net position have been determined on the same basis as they are reported by DPERS. Employer Allocation Percentage Methodology The amounts assigned to each employer in the Schedule of Pension Amounts by Employer is each employer’s proportional share of the net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense (the Collective Pension Amounts) determined in accordance with Governmental Accounting Standards Board No. 68, Accounting and Financial Reporting for Pensions (GASB 68). Management has elected to allocate the employer’s proportionate shares of the collective pension amounts based on the percentage of actual employer contributions as documented in the Schedule of Employer Allocations. The City’s proportionate share percentage is 8.1574% for the current fiscal year, 8.5117% for the prior year and the change is a decrease of 0.3543%. Pension Liabilities, Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources related to Pensions On June 30, 2022, the City reported a net pension asset of $11,224,982 for its proportionate share of the collective net pension asset. The net pension asset was measured as of June 30, 2020, and the total pension asset used to calculate the net pension asset was determined by an actuarial valuation as of June 30, 2020, with update procedures used to roll forward the pension liability to June 30, 2021. The City’s proportion of the net pension asset was based on the percentage of actual employer contributions. 120 204

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. The City recognized pension expense of $1,235,836 for the year ended June 30, 2022, associated with membership within the Delaware State Police Pension Plan. As of June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: County and Municipal Police & Firefighter's Pension Plan Deferred Outflows of Resources Differences between expected and actual experience $ 1,062,109 Change in proportion 23,816 Changes of assumptions 385,726 City contributions subsequent to the measurement date 1,375,074 Total Deferred Outflows of Resources $ 2,846,725 Deferred Inflows of Resources Differences between expected and actual experience $ (437,324) Changes in assumptions (817,480) Net difference between actual and expected earnings (9,538,002) Change in proportion (89,693) Total Deferred Inflows of Resources $ (10,882,499) The City’s contributions of $1,375,074 are subsequent to the measurement date and therefore are reported as deferred outflows of resources and will be recognized as an increase of the net pension asset in the year ending June 30, 2023. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: County and Municipal Police & Firefighter's Pension Plan Fiscal Year Ending June 30: 2023 $ (2,450,779) 2024 (2,269,848) 2025 (2,402,895) 2026 (2,216,335) 2027 87,314 Thereafter (158,306) 121 205

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. The proportionate share of the total pension liability for the June 30, 2021 measurement date was determined by an actuarial valuation as of June 30, 2020, with update procedures used to roll forward the total pension liability to June 30, 2021. These actuarial valuations used the following actuarial assumptions: Actuarial Assumptions Investment rate of return/Discount rate1 7.0% Projected salary increases1 2.5% + Merit Cost-of-living adjustments 0.0% (1) Inflation is included at 2.5%. The total pension liabilities are measured based on assumptions pertaining to the interest rates, inflation rates, and employee demographic behavior in future years. It is likely that future experience will not exactly conform to these assumptions. To the extent that actual experience deviates from these assumptions, the emerging liabilities may be higher or lower than anticipated. The more the experience deviates, the larger the impact on future financial statements. Mortality assumptions are based on the RP – 2014 tables with gender adjustments for healthy annuitants and disabled retirees and an adjusted version on MP-2015 mortality improvement scale on a fully generational basis. Projected benefit payments do not include the effects of projected ad hoc cost-of-living adjustments (ad hoc COLAs) as they are not substantively automatic. The primary considerations relevant to making this determination include the historical pattern of granting the changes and the consistency in the amounts of the changes. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by an asset allocation percentage, which is based on the nature and mix of current and expected plan investments, and by adding expected inflation. Best estimates of geometric real rates of return for each major asset class included in the Plan’s current and expected asset allocation are summarized in the following table: County and Municipal Police & Firefighter's Pension Plan Long-Term Expected Rate of Return Long-Term Expected Real Asset Rate of Return Allocation Asset class: Domestic equity 5.7% 32.3% International equity 5.7 18.1 Fixed income 2.0 20.6 Alternative investments 7.8 24.2 Cash and equivalents - 4.8 122 206

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part C – Notes to the Basic Financial Statements Item 5. Discount Rate The discount rate for all plans used to measure the total pension liability was 7.0%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rates and that contributions from employers will be made at rates determined by the Board of Pension Trustees, actuarially determined. Based on those assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis of Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability (asset) of the Plan, calculated using the discount rate of 7.0%, as well as what the Plans’ net pension liability (asset) would be if it were calculated using a discount rate that is one-percentage-point lower or one-percentage-point higher than the current rate (dollar values expressed in thousands): County and Municipal Police & Firefighter's Pension Plan (dollar amounts expressed in thousands) 1% Current 1% Decrease Discount Rate Increase 6.00% 7.00% 8.00% Proportionate share of the net pension liability (asset) $ (5,182) $ (11,225) $ (16,156) Separately issued financial statements for DPERS are available from the pension office at: McArdle Building, Suite 1 860 Silver Lake Blvd Dover, DE 19904 Or at the following web address: www.delawarepensions.com 123 207

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section Item 5. PART D REQUIRED SUPPLEMENTARY INFORMATION 209 125

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. SERVICES TO OUR RESIDENTS AND CUSTOMERS Animal Control Leaf Collection Beautification Building Library Bulky Trash Collection Parks & Recreation Community Development/Housing Planning & Zoning Community Policing Police Protection Elections Snow Removal Electricity Stormwater Economic Development Street Maintenance/Cleaning Emergency Preparedness Trash Collection Fire Protection Tree Maintenance Inspections & Code Enforcement Water & Wastewater 210 126

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. CITY OF DOVER, DELAWARE GENERAL FUND Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Non-GAAP Basis) For the Year Ended June 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance $ 5,546,400 $ 10,635,700 $ 10,635,736 $ 36 REVENUES: Fines & Police Revenue 630,300 511,600 508,082 (3,518) Library Revenues 142,100 110,800 120,687 9,887 Kent County Book Reimbursement 250,000 250,000 139,901 (110,099) Business Licenses 1,500,000 1,500,000 1,400,883 (99,117) Permits and Other Fees 1,400,000 1,564,000 1,641,967 77,967 Miscellaneous Charges 10,000 236,100 230,013 (6,087) Police Extra Duty Fees 370,000 370,000 412,026 42,026 Property Taxes 15,267,700 15,267,700 15,241,104 (26,596) Recreation Revenue 110,000 100,000 128,605 28,605 Franchise Fees 600,000 600,000 605,325 5,325 Sanitation Fees 3,421,000 3,421,000 3,371,689 (49,311) Rent Revenue - Garrison Farm 105,000 105,000 108,483 3,483 Court of Chancery Fees 1,400,000 2,000,000 2,095,840 95,840 Investment Income 90,000 90,000 94,580 4,580 Interfund Service Receipts 5,326,200 5,351,000 5,420,991 69,991 Grants: - Police Extra Duty 130,000 130,000 127,383 (2,617) Police Grants Fund 308,900 308,900 312,500 3,600 Police Pension Grant 500,000 500,000 668,520 168,520 Green Energy Grant 98,500 98,500 98,500 - Miscellaneous Federal Grant Revenue 520,000 15,600 15,600 - Miscellaneous State Grant Revenue - 92,000 23,421 (68,579) Transfer from: Transfer Tax 1,400,000 2,800,000 3,902,170 1,102,170 Municipal Street Aid 750,000 792,000 792,349 349 Civil Traffic Penalties 400,000 250,000 198,594 (51,406) Water Fund 500,000 500,000 500,000 - Wastewater Fund 500,000 500,000 500,000 - Electric Fund 11,000,000 11,000,000 11,000,000 - ARPA Grant - - 31,411 31,411 Total Revenues 46,729,700 48,464,200 49,690,624 1,226,424 TOTAL BEGINNING BALANCE & REVENUES $ 52,276,100 $ 59,099,900 $ 60,326,360 $ 1,226,460 (Continued) 211 127

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. (Continued) VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) EXPENDITURES: Tax Assessor $ 263,800 $ 263,800 $ 186,927 $ 76,873 Fire 797,200 797,200 730,051 67,149 Library 1,859,900 1,859,900 1,723,517 136,383 Recreation 1,191,500 1,217,200 1,078,718 138,482 Life Safety 472,300 513,200 480,852 32,348 Code Enforcement 654,100 654,100 559,617 94,483 Planning 642,000 640,200 500,696 139,504 Inspections 651,200 665,600 654,049 11,551 Police 18,544,700 18,556,600 18,119,709 436,891 Police Extra Duty 500,000 541,400 551,556 (10,156) Streets 636,000 703,600 607,880 95,720 Stormwater 774,100 711,200 577,807 133,393 Sanitation 2,564,800 2,564,800 2,399,756 165,044 Public Works - Engineering 181,100 184,400 166,209 18,191 Allocated Expenditures: City Clerk 535,800 535,800 462,097 73,703 Council 157,200 190,800 121,596 69,204 Grounds Maintenance 1,487,500 1,487,500 1,463,562 23,938 City Manager 920,100 954,700 994,906 (40,206) Information Technology 738,500 738,500 669,659 68,841 Finance 932,100 1,069,500 928,002 141,498 Public Works-Administration 587,200 608,000 477,797 130,203 Facilities Management 837,000 852,800 847,418 5,382 Procurement and Inventory 738,600 725,600 699,110 26,490 Fleet Maintenance 906,500 926,500 924,192 2,308 Customer Services 1,048,300 1,071,600 1,071,873 (273) Human Resources 600,200 612,000 542,311 69,689 Mayor 222,800 224,300 197,734 26,566 Insurance 1,050,000 905,000 893,606 11,394 Contribution to Downtown Dover Partnership 150,000 150,000 150,000 - Subtotal 40,644,500 40,925,800 38,781,207 2,144,593 Appropriations: Bank & Credit Card Fees 30,000 30,000 26,356 3,644 Debt Service - Principal and Interest 632,000 632,000 632,137 (137) Appropriation to the General Employee Pension Fund - 1,234,300 1,234,300 - Transfer to Capital Fund for Projects 3,025,900 2,129,100 2,129,100 - Retirees Health Care 2,156,000 2,156,000 2,156,000 - Appropriation to Police Pension Fund 435,100 615,200 615,200 - Transfer to Cable Franchise Reserve - - 13,421 (13,421) Transfer to Electric Fund (ERP) - 25,000 25,000 - Appropriation to Police Pension Fund - State Grant 500,000 500,000 668,520 (168,520) Street Lights 800,000 800,000 826,038 (26,038) Total Expenditures 48,223,500 49,047,400 47,107,279 1,940,121 Budget Balance 4,052,600 10,052,500 13,219,081 (3,166,581) Total Budget Balance & Expenditures $ 52,276,100 $ 59,099,900 $ 60,326,360 $ (1,226,460) Budget Balance - Working Capital $ 13,219,081 Perspective and GAAP (Non-GAAP) Differences: Leases 27,250 Fair Value of Investment Adjustment (190,969) Deferred Revenues - Non-spendable (114,332) Inventory & Prepaids - Non-spendable (353,799) Unassigned Fund Balance $ 12,587,231 212 128

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. Police Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios (in Thousands) Fiscal Year Ending June 30, 2022 2021 2020 2019 2018 2017 2016 2015 2014 Total Pension Liability Service cost $ - $ - $ - $ - $ - $ - $ - $ - $ - Interest on total pension liability 1,129 1,162 1,134 1,173 1,197 1,211 1,281 1,311 1,325 Effect of economic/demographic (gains) or losses (246) - 206 (157) - - (836) 286 25 Effect of assumption changes or inputs 48 (134) 633 (88) (44) 116 - 932 - Benefit payments (1,517) (1,534) (1,537) (1,517) (1,541) (1,528) (1,528) (1,557) (1,548) Net change in total pension liability (586) (506) 436 (590) (388) (201) (1,083) 972 (198) Total pension liability, beginning 18,138 18,644 18,208 18,798 19,186 19,387 20,471 19,499 19,697 Total pension liability, ending (a) $ 17,552 $ 18,138 $ 18,644 $ 18,208 $ 18,798 $ 19,186 $ 19,388 $ 20,471 $ 19,499 Fiduciary Net Position Employer contributions $ 1,287 $ 988 $ 1,033 $ 1,097 $ 1,295 $ 1,118 $ 1,093 $ 1,386 $ 1,229 Investment income net of investment expenses (2,442) 3,816 439 820 908 1,433 279 283 1,583 Benefit payments (1,517) (1,534) (1,537) (1,517) (1,541) (1,528) (1,528) (1,557) (1,548) Administrative expenses (12) (7) (5) (5) (5) (4) (4) (6) (20) Net change in plan fiduciary net position (2,684) 3,263 (70) 394 657 1,019 (160) 106 1,244 Fiduciary net position, beginning 17,488 14,225 14,295 13,900 13,243 12,225 12,385 12,279 11,035 Fiduciary net position, ending (b) $ 14,804 $ 17,488 $ 14,225 $ 14,295 $ 13,900 $ 13,244 $ 12,225 $ 12,385 $ 12,279 Net pension liability, ending = (a) - (b) $ 2,748 $ 650 $ 4,419 $ 3,913 $ 4,898 $ 5,942 $ 7,163 $ 8,086 $ 7,220 Fiduciary net position as a % of total pension liability 84.34% 96.42% 76.30% 78.51% 73.95% 69.03% 63.05% 60.50% 62.97% This schedule is presented to illustrate the requirement to show information for 10 years. However, fiscal year 2013 is not available. 213 129

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. Police Pension Fund Schedule of Employer Contributions Contribution as Fiscal Year Actuarially Actual Contribution a Percentage of Ended Determined Employer Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll 2022 $ 1,115,164 $ 1,287,062 $ (171,898) $ - N/A 2021 935,006 987,862 (52,856) - N/A 2020 964,518 1,033,149 (68,631) - N/A 2019 1,050,375 1,097,151 (46,776) - N/A 2018 1,205,092 1,294,750 (89,658) - N/A 2017 1,176,462 1,118,346 58,116 - N/A 2016 1,212,000 1,093,278 118,722 - N/A 2015 1,176,422 1,385,789 (209,367) - N/A 2014 1,155,110 1,229,363 (74,253) - N/A 2013 1,155,796 1,074,599 81,197 - N/A Police Pension Fund Schedule of Investment Returns (1) Fiscal year 2017 through 2022 Fiscal year ending June 30 2022 2021 2020 2019 2018 2017 Money-weighted rate of return, net of investment expense (15.21%) 29.77% 3.46% 6.43% 7.16% 12.34% (1) This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2017 is not available. The total pension liability was determined by an actuarial valuation as of June 30, 2022 with liabilities projected to the June 30, 2022 measurement date using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified. Any significant changes during this period have been reflected as prescribed by GASB 67 and 68. Actuarial Methods and Significant Assumptions Valuation date June 30, 2022 Actuarial cost method Entry Age Method Amortization method Level Dollars Amortization period Closed Asset valuation method Fair Market Value Actuarial assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases none, no remaining active participants Includes inflation at 2.5% 214 130

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. Automatic Cost of living (retirees) 2.0% Mortality Rates Healthy PubS-2010 Public Safety Mortality Table with fully generational improvements from 2010 based on assumptions from the Society of Actuaries MP- 2021 Scale Disabled PubS-2010 Public Safety Disabled Retiree Mortality Table with fully generational improvements from 2010 based on assumptions from the Society of Actuaries MP-2021 Scale 215 131

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. General Employee Pension Fund Schedule of Changes in Net Pension Liability, Related Ratios (in Thousands) 2022 2021 2020 2019 2018 2017 2016 2015 2014 Total Pension Liability Service cost $ 395 $ 396 $ 395 $ 424 $ 406 $ 433 $ 401 $ 459 $ 484 Interest on total pension liability 4,169 4,178 3,991 3,989 3,827 3,729 3,719 3,861 3,810 Differences between expected and actual experience 878 - 1,447 - 1,504 41 (267) (422) 111 Effect of assumption changes or inputs 113 (290) 1,260 (279) (99) 1,200 - 1,956 - Benefit payments (4,561) (4,291) (4,120) (4,033) (3,976) (3,746) (3,718) (3,700) (3,654) Net change in total pension liability 994 (7) 2,973 101 2,492 1,657 135 2,154 751 Total pension liability, beginning 66,024 66,031 63,058 62,957 60,465 58,808 58,673 56,519 55,768 Total pension liability, ending (a) $ 67,018 $ 66,024 $ 66,031 $ 63,058 $ 62,957 $ 60,465 $ 58,808 $ 58,673 $ 56,519 Fiduciary Net Position Employer contributions $ 4,482 $ 2,428 $ 2,606 $ 2,704 $ 4,777 $ 2,877 $ 3,090 $ 3,420 $ 3,473 Member contributions 171 173 183 190 195 202 202 209 212 Investment income net of investment expenses (7,865) 12,706 1,550 2,765 2,757 4,351 850 955 4,153 Benefit payments (4,561) (4,292) (4,120) (4,033) (3,976) (3,746) (3,718) (3,700) (3,654) Administrative expenses (52) (21) (19) (19) (18) (18) (16) (19) (20) Net change in plan fiduciary net position (7,825) 10,994 200 1,607 3,735 3,666 408 865 4,164 Fiduciary net position, beginning 55,902 44,908 44,708 43,100 39,364 35,699 35,291 34,426 30,263 Fiduciary net position, ending (b) $ 48,077 $ 55,902 $ 44,908 $ 44,708 $ 43,100 $ 39,365 $ 35,699 $ 35,291 $ 34,427 Net pension liability, ending = (a) - (b) $ 18,941 $ 10,122 $ 21,123 $ 18,350 $ 19,857 $ 21,100 $ 23,109 $ 23,382 $ 22,092 Fiduciary net position as a % of total pension liability 71.74% 84.67% 68.01% 70.90% 68.46% 65.10% 60.70% 60.15% 60.91% Covered payroll $ 4,569 $ 5,067 $ 5,219** $ 5,557* $ 5,561 $ 5,636 $ 5,504 $ 5,864 $ 5,971 Net pension liability as a % of covered payroll 414.56% 199.79% 404.77% 330.20% 357.06% 374.39% 419.88% 398.73% 370.03% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. Covered payroll historical adjustments as follows: * 6/30/2019 - $5,557,431 corrected covered payroll. Total pensionable compensation from the plan year ending 6/30/2018 per census data. $5,395,564 times (x) 3.00% based on the assumed rate of annual pay increases for the plan. (Related Ratios FY20 report presentation was $5,396). ** 6/30/2020 - Adjusted covered payroll $5,218,784 represents the total pensionable compensation for plan participants from the plan year ending 6/30/2020, based on the census data that was provided as of 7/1/2020. (Related Ratios FY20 report presentation was $5,067). 216 132

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. General Employee Pension Plan Schedule of Employer Contributions Contribution as Fiscal Year Actuarially Actual Contribution a Percentage of Ended Determined Employer Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll 2022 $ 3,232,888 $ 3,248,190 $ (15,302) $ 4,569,076 71.09% 2021 2,881,048 2,427,721 453,327 5,066,622 47.92% 2020 2,914,587 2,606,067 308,520 5,218,784 49.94% 2019 2,885,737 2,703,583 182,154 5,557,431 48.65% 2018 3,016,283 4,777,466 (1,761,183) 5,561,300 85.91% 2017 2,824,098 2,876,657 (52,559) 5,635,987 51.04% 2016 3,025,982 3,089,409 (63,427) 5,504,387 56.13% 2015 2,983,776 3,419,512 (435,736) 5,864,089 58.31% 2014 2,628,694 3,472,736 (844,042) 5,970,703 58.16% 2013 3,217,964 9,788,571 (6,570,607) 7,076,322 138.33% There were historical adjustments made to covered payroll for 2019 and 2020, as noted on the Schedule of Changes in Net Pension Liability, Related Ratios (in Thousands). General Employee Pension Plan Schedule of Investment Returns (1) Fiscal year 2017 through 2022 Fiscal year ending June 30 2022 2021 2020 2019 2018 2017 Money-weighted rate of return, net of investment expense (15.35%) 29.71% 3.64% 6.76% 7.12% 12.50% (1) This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2017 is not available. The total pension liability was determined by an actuarial valuation as of June 30, 2022 with liabilities projected to the June 30, 2022 measurement date using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified. Any significant changes during this period have been reflected as prescribed by GASB 67 and 68. Actuarial Methods and Significant Assumptions Valuation date June 30, 2022 Actuarial cost method Entry Age Method Amortization method Level Dollar Amortization period Closed; 15-year – Unfunded AAL Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 6.5% Discount rate 6.5% Projected salary increases 3.0% 217 133

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. Includes inflation at 2.51% Mortality Rates Healthy Participants: PubG-2010 General Mortality Table with fully generational improvements from 2010 based on Society of Actuaries Scale MP-2021 Survivors: Pub-2010 Continuing Survivors Mortality Table with fully generational improvements from 2010 based on Society of Actuaries Scale MP-2021 Disabled PubNS-2010 Non-Public Safety Disabled Retiree Mortality Table with fully generational improvements from 2010 based on Society of Actuaries Scale MP-2021 218 134

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. County & Municipal Police and Firefighter's Pension Plan Schedule of the City of Dover's Proportionate Share of the Net Pension Liability Measurement Date 2021 2020 2019 2018 2017 2016 2015 2014 City's proportion of the net pension liability(asset) 8.1574% 8.5117% 8.3407% 8.4242% 8.6629% 9.0042% 9.6070% 9.6334% City's proportionate share of the net pension liability(asset) $(11,224,983) $1,308,109 $2,395,686 $1,940,156 $ 873,337 $1,431,281 $ (524,958) $(1,042,117) City's covered payroll $ 7,910,676 $7,760,905 $7,372,815 $6,843,159 $6,996,159 $7,117,770 $ 7,060,453 $ 6,582,053 City's proportionate share of the net pension liability(asset) as a percentage of its covered payroll (141.90%) 16.86% 32.49% 28.35% 12.48% 20.11% (7.44%) (15.83%) Plan fiduciary net position as a percentage of the total pension liability 128.19% 96.67% 93.25% 94.10% 109.23% 105.59% 101.97% 104.47% GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10-year trend is compiled, the City will present information for those years for which information is available. County & Municipal Police and Firefighter's Pension Plan Schedule of City of Dover's Contributions Fiscal Year Ending 2022 2021 2020 2019 2018 2017 2016 2015 2014 Contractually required contribution $ 1,375,074 $ 1,328,868 $ 1,317,526 $ 1,276,048 $ 1,258,817 $ 944,356 $ 951,199 $ 977,587 $ 933,750 Contributions in relation to the contractually required contribution (1,375,074) (1,328,868) (1,317,526) (1,276,048) (1,258,817) (944,356) (951,199) (977,587) (933,750) Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - City's covered payroll $ 8,560,011 $ 7,910,676 $ 7,760,905 $ 7,372,815 $ 6,843,159 $ 6,996,159 $ 7,117,770 $ 7,060,453 $ 6,582,053 Contributions as a percentage of covered payroll 16.06% 16.80% 16.98% 17.31% 18.40% 13.50% 13.36% 13.85% 14.19% This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2014 is not available. 135 219

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. OPEB Trust Fund Schedule of Changes in Net OPEB Liability, Related Ratios (In Thousands) Fiscal Year Ending June 30 2022 2021 2020 2019 2018 2017 Total OPEB Liability Service cost $ 1,118 $ 1,089 $ 1,120 $ 1,202 $ 1,222 $ 1,655 Interest 4,057 4,095 4,211 4,288 4,498 4,682 Net difference between expected and actual experience (2,762) (5,370) (4,758) (5,152) (6,202) (2,871) Effect of assumption changes or inputs (3,524) 2,448 483 1,311 - (4,833) Benefit payments (2,903) (2,867) (2,755) (2,748) (2,704) (2,663) Net change in total OPEB liability (4,014) (605) (1,699) (1,099) (3,186) (4,030) Total OPEB liability, beginning 62,716 63,321 65,020 66,119 69,305 73,335 Total OPEB liability, ending (a) $ 58,702 $ 62,716 $ 63,321 $ 65,020 $ 66,119 $ 69,305 Fiduciary Net Position Employer contributions $ 4,042 $ 3,504 $ 4,326 $ 5,448 $ 5,722 $ 4,603 Investment income net of investment expenses (8,960) 12,864 1,871 2,184 2,295 3,074 Benefit payments (2,903) (2,867) (2,755) (2,748) (2,704) (2,663) Administrative expenses (7) (3) (9) (3) (8) (3) Net change in plan fiduciary net position (7,828) 13,498 3,433 4,881 5,305 5,011 Fiduciary net position, beginning 56,171 42,673 39,240 34,359 29,054 24,043 Fiduciary net position, ending (b) $ 48,343 $ 56,171 $ 42,673 $ 39,240 $ 34,359 $ 29,054 Net OPEB liability, ending = (a) - (b) $ 10,359 $ 6,545 $ 20,648 $ 25,780 $ 31,760 $ 40,251 Fiduciary net position as a % of total OPEB liability 82.40% 89.60% 67.40% 60.40% 52.00% 41.90% Covered payroll $ 20,250 $ 19,756 $ 20,262 $ 19,578 $ 19,101 $ 17,657 Net OPEB liability as a % of covered payroll 51.20% 33.10% 101.90% 131.70% 162.20% 210.70% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. 136 220

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. OPEB Trust Fund Schedule of City’s Contributions (In Thousands) For the year ended June 30 2022 2021 2020 2019 2018 2017 Actuarially determined contribution (ADC) $ 1,712 $ 2,780 $ 3,190 $ 4,044 $ 4,560 $ 4,644 Contributions in relation to the ADC (4,042) (3,504) (4,326) (5,447) (5,722) (4,603) Contributions deficiency / (excess) $ (2,330) $ (724) $ (1,136) $ (1,403) $ (1,162) $ 41 Covered payroll $ 20,250 $ 19,756 $ 20,262 $ 19,580 $ 19,578 $ 19,101 Contributions as a percentage of covered payroll 20.0% 17.7% 21.4% 27.8% 29.2% 24.1% This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, governments should present information for those years for which information is available. Post-Employment Other than Pensions Plan (OPEB) Schedule of Investment Returns (1) Fiscal year 2017 through 2022 Fiscal year ending June 30 2022 2021 2020 2019 2018 2017 Money-weighted rate of return, net of investment expense (16.04%) 30.15% 4.77% 6.10% 7.87% 12.66% (1) This schedule is presented to illustrate the requirement to show information for 10 years. However, information prior to June 30, 2017 is not available. Actuarial Methods and Significant Assumptions The total OPEB liability was determined by an actuarial valuation as of July 1, 2021 with no adjustments, with liabilities projected to the June 30, 2022 measurement date on a “no loss / no gain” basis, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Actuarial cost method Entry Age Normal Level % of Salary Amortization method Level Dollars Remaining amortization period 26 years Asset valuation method Fair Market Value Actuarial Assumptions: Investment rate of return 7.0% Discount rate 7.0% Inflation 2.5% per year included in payroll growth Healthcare cost trend rates Pre-65 Medical / Rx Initial rate of 7.5% decreasing by 0.5% annually to an ultimate rate of 4.5% Post-65 Medical / Rx Initial rate of 7.5% decreasing by 0.5% annually to an ultimate rate of 4.5% Mortality Total Dataset Headcount Weighted Mortality Table fully generational using scale MP-2020 a. Non-Police: SOA Pub-2010 General b. Police: SOA Pub-2010 Public Safety c. Surviving Spouses: SOA Pub-2010 Contingent Survivors 221 137

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part D – Required Supplementary Information Item 5. NOTES TO REQUIRED SUPPLEMENTARY INFORMATION GOVERNMENTAL BUDGETS Budgetary Basis of Accounting The City prepares its budget for the General Fund revenue on a modified accrual basis. The expenditures are accounted for when the purchase orders are issued. Encumbrances are established when purchase orders are issued and accounted for as a reservation of fund balance at year-end and are not on a modified accrual basis. The budget is amended in the subsequent year for the outstanding encumbrances of the prior year. The modified accrual basis of accounting is used for the fund financial statements. General Fund actual revenues exceeded the final budget by $1,226,460 with positive variances in library revenues, permits & other fees, police extra duty fees, recreation revenue, franchise fees, rent revenue – garrison farm, court of chancery fees, investment income, interfund service receipts, police grants fund, police pension grant, transfer tax, municipal street aid and ARPA grant funds. The sources of revenues with negative variances are fines and police revenue, Kent County book reimbursement, business licenses, miscellaneous charges, property taxes, sanitation fees, police extra duty fees, miscellaneous state grant revenue, and civil traffic penalties. Actual total expenditures were lower than budget by $1,940,121 due to lower than budgeted expense across almost all functions a result of personnel reductions through attrition and retirements. The net result is an increase of $3,166,581 to the General Fund ending fund balance. Budget Amendments During this fiscal year, the City Council amended the budget two times. The budget amendment ordinances were primarily for the following purposes: 1. To re-appropriate budget balances for ongoing capital projects, to amend the grant budgets and reserve accounts for the actual results from the prior fiscal year and to adjust program revenues and expenses based on actual amounts. 2. To amend revenue and expense accounts based on actual experience during fiscal year 2022. The differences for the year ended June 30, 2022 were as follows: Total revenues- budgetary basis $ 49,690,624 Total expenditures- budgetary basis 47,107,279 Net decrease in fund balance- budgetary basis 2,583,345 Perspective differences Transfer to/from Reserves (193,531) Leases 27,250 General Fund Subfund Expense Activity for the Capital Project Fund (2,497,205) Intrafund Transfers to the General Fund- Capital Projects Fund 2,129,100 General Fund Subfund Revenue Activity for the Capital Project Fund 2,078,468 Fair Value of Investments (446,407) Deferred Revenue Adjustment 181,233 Net increase in fund balance - GAAP Basis $ 3,862,253 222 138

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section Item 5. PART E SUPPLEMENTARY INFORMATION 223 139

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. FINANCIAL STATEMENTS GENERAL FUND COMBINING SCHEDULES The General Fund contains a sub-fund for capital projects which is separately budgeted. The combining schedules are presented in the supplementary information. The budgetary comparison for the Governmental Capital Projects Fund has its own separate budget and is presented in this section to show legal compliance. The perspective difference between the basis of budgeting and GAAP is explained in the reconciliation of the basis of budgeting to GAAP. 225 141

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. The City of Dover, Delaware Combining General Fund Balance Sheet June 30, 2022 General Total General Capital Projects General Fund Fund Funds Assets: Cash and Cash Equivalents $ 8,478,565 $ 5,964,760 $ 14,443,325 Investments 4,917,086 3,427,761 8,344,847 Restricted Investments 19,198 - 19,198 Receivables, net Accounts 2,789,185 748 2,789,933 Taxes 54,765 - 54,765 Due from Other Funds 717,632 25,989 743,621 Temporary Advances 40,000 - 40,000 Prepaid Items 158,549 - 158,549 Inventory, at Cost 195,250 - 195,250 Total Assets $ 17,370,230 $ 9,419,258 $ 26,789,488 Liabilities: Accounts Payable $ 1,137,054 $ 126,436 $ 1,263,490 Unearned Revenue 34,673 57,825 92,498 Due to Other Funds 48 - 48 Other 69,694 - 69,694 Total Liabilities 1,241,469 184,261 1,425,730 Deferred Inflows of Resources: Unavailable revenue 209,083 - 209,083 Leases Revenue 2,152,256 - 2,152,256 Total Deferred Inflows of Resources 2,361,339 - 2,361,339 Fund Balances: Non-Spendable Inventory and Prepaids 353,799 - 353,799 Library Endowment 5,000 - 5,000 Patronage Stock 16,594 - 16,594 Restricted Library Endowment 2,604 - 2,604 Verizon Cable Franchise 64,814 - 64,814 Committed Contingency 737,380 - 737,380 Parkland Reserve - 1,425,937 1,425,937 Assigned Capital Projects - 7,809,060 7,809,060 Unassigned 12,587,231 - 12,587,231 Total Fund Balances 13,767,422 9,234,997 23,002,419 Total Liabilities and Fund Balances $ 17,370,230 $ 9,419,258 $ 26,789,488 226 142

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. The City of Dover, Delaware Combining Schedule of Revenues, Expenditures and Changes in Fund Balances of the General Fund (Non-GAAP Basis) For the Year Ended June 30, 2022 General Total General Capital Projects General Fund Fund Funds Revenues Fines $ 508,082 $ - $ 508,082 Library Revenue- General 120,687 - 120,687 Library Revenue County Reimbursement 139,901 - 139,901 Licenses and Permits 3,042,850 - 3,042,850 Sanitation Fees 3,371,689 - 3,371,689 Miscellaneous Services 1,484,452 458,702 1,943,154 Property Taxes 15,241,104 - 15,241,104 Grants Received 1,245,924 1,259,728 2,505,652 Court of Chancery Fees 2,095,840 - 2,095,840 Investment Income 68,224 8,181 76,405 Total Revenues 27,318,753 1,726,611 29,045,364 Expenditures Current: General Government 3,031,267 - 3,031,267 Library Services 1,723,517 - 1,723,517 Public Safety and Law Enforcement 21,070,834 362,327 21,433,161 Public Works 3,391,584 808,091 4,199,675 Recreational Services 1,078,718 78,723 1,157,441 Streets and Sanitation Services 3,007,636 755,051 3,762,687 Engineering services 166,209 25,149 191,358 Financial Administration 2,659,164 76,152 2,735,316 Garage and Stores 1,633,672 296,512 1,930,184 Insurance 893,606 - 893,606 Retiree Health Care 2,156,000 - 2,156,000 Employee Pension 1,234,300 - 1,234,300 Community and Economic Development 150,000 - 150,000 Street Lights 826,038 - 826,038 Debt Service: Principal Retirement 487,315 - 487,315 Interest and Fiscal Charges 144,822 - 144,822 Total Expenditures 43,654,682 2,402,005 46,056,687 Excess (deficiency) of Revenues over Expenditures (16,335,929) (675,394) (17,011,323) Other Financing Sources and Uses Reserve Transfers - 256,657 256,657 Interfund Transfers 18,919,274 2,129,100 21,048,374 Total Other Financing Sources and Uses 18,919,274 2,385,757 21,305,031 Net Change in Fund Balances 2,583,345 1,710,363 4,293,708 Fund Balances at Beginning of Year 10,635,736 3,846,204 14,481,940 Fund Balances at End of Year 13,219,081 5,556,567 18,775,648 Perspective and GAAP (Non-GAAP) Differences: Fair Value of Investment Adjustment (190,969) (133,056) (324,025) Deferred Revenues - Non-spendable (114,332) - (114,332) Inventory & Prepaids - Non-spendable (353,799) - (353,799) Capital Asset - Assigned - (5,423,511) (5,423,511) Unassigned Fund Balance $ 12,559,981 $ - $ 12,559,981 227 143

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. City of Dover, Delaware Governmental Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget & Actual (Non-GAAP Basis) For the Year Ended June 30, 2022 Variance Original Final Positive Budget Budget Actual (Negative) Beginning Balance - Working Capital $ 3,331,500 $ 4,832,300 $ 3,846,204 $ (986,096) Revenues: State Grant - Other 1,333,000 1,088,800 1,259,728 170,928 Police Grants 23,800 23,800 - (23,800) Miscellaneous Receipts - 274,900 111,141 (163,759) Transfer from General Fund for Projects 3,025,900 2,129,100 2,129,100 - Transfer from Parkland Reserve 490,000 - 1,150 1,150 Transfer from Capital Asset Reserve 140,000 - - - Transfer from Lodging Tax - 275,000 355,742 80,742 Transfer from Other Reserves - - 350,707 350,707 Total Revenues 5,012,700 3,791,600 4,207,568 415,968 Total Beginning Balance & Revenues $ 8,344,200 $ 8,623,900 $ 8,053,772 $ (570,128) Expenditures: Fire $ 250,300 $ 169,800 $ 161,018 $ 8,782 Library 25,000 25,000 - 25,000 Recreation 756,000 142,100 78,723 63,377 Code Enforcement 50,300 - - - Planning - 500 458 42 Inspections 25,100 47,700 22,578 25,122 Police 526,000 672,500 178,273 494,227 Streets 506,000 3,096,000 755,051 2,340,949 Sanitation 166,200 660,000 - 660,000 Grounds 125,000 125,400 56,086 69,314 Stormwater 2,546,200 1,892,000 666,805 1,225,195 Information Technology 36,600 84,100 76,152 7,948 Facilities Management - 852,000 85,200 766,800 Engineering - 25,300 25,149 151 Purchasing - 296,600 296,512 88 Subtotal 5,012,700 8,089,000 2,402,005 5,686,995 Transfers and Miscellaneous Expenses: Transfer to Capital Asset Reserve - 71,000 70,914 86 Transfer to Parkland Reserve - - 2,500 (2,500) Transfer to Other Reserve - - 21,786 (21,786) Total Expenditures 5,012,700 8,160,000 2,497,205 5,662,795 Budget Balance - Working Capital 3,331,500 463,900 5,556,567 (5,092,667) Budget Balance & Expenditures $ 8,344,200 $ 8,623,900 $ 8,053,772 $ 570,128 Budget Balance - Working Capital $ 5,556,567 Perspective and GAAP (Non-GAAP) Differences: Fair value of investment adjustment (133,056) Assigned to Capital assets 2,385,549 Committed to Parks & Recreation improvements 1,425,937 Total Fund Balances $ 9,234,997 228 144

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS Special Revenue Funds include the group of funds classified as grant funds, Lodging Tax Fund, and a Realty Transfer Tax Fund. The proceeds from specific revenue sources are restricted to specified expenditure purposes. The City adopts budgets for selected Special Revenue Funds. Combining and individual statements appear in this section. POLICE FEDERAL GRANTS The City of Dover Police Department receives various grants from the U.S. Department of Justice for local law enforcement. All federal grant transactions are recorded in this fund. POLICE STATE GRANTS The City of Dover Police Department receives various grants from the State of Delaware for public and highway safety. All state grant transactions are recorded in this fund. LIBRARY GRANTS The City of Dover Public Library receives various grants from the State of Delaware, Kent County, Miscellaneous entities, and the Federal Government. Activities associated with these grants are recorded in this fund. MUNICIPAL STREET AID The State of Delaware has passed legislation to share a portion of Delaware’s motor fuel tax revenue with local municipalities through grants. The amount of the grant the City receives depends on its population and miles of streets maintained. The grant is used for street light expense within the City. CDBG HOUSING GRANTS The City receives a U.S. Department of Housing and Urban Development Entitlement Grant for the Community Development Block Grant Program. This is to provide decent housing, a suitable living environment and expand economic opportunities primarily for people of low and moderate incomes. 229 145

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. FINANCIAL STATEMENTS SPECIAL REVENUE FUNDS (continued) ARPA FUNDING GRANT The American Rescue Plan Act provided relief funds to the City of Dover due to the loss of public sector revenue due to the coronavirus pandemic. STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS The State of Delaware Department of Transportation grants provide funds for specific street projects in the City. State law provides funds to the State’s elected officials for suburban street aid, which officials can then provide to their respective districts. The City receives these funds for designated street projects and records all transactions for this fund. SUBSTANCE ABUSE PREVENTION GRANT The State of Delaware General Assembly Grant-In-Aid Program provides funds to implement a substance abuse prevention program for at-risk and/or disadvantaged youths in the City of Dover. ELECTRONIC RED-LIGHT SAFETY PROGRAM (ERLSP) The State of Delaware Department of Transportation provides a grant to municipalities that implement the Electronic Red- L i g h t Safety Program. Under this program, the City is granted a portion of the fines collected from drivers who are ticketed for running red lights installed with electronic photo identification equipment within the City limits. LODGING TAX Pursuant to an act of the Delaware Legislature, City Council adopted an ordinance to enact a local lodging tax paid by the occupants of hotels, motels, and tourist homes in the City limits. All lodging tax receipts are reserved and directed toward infrastructure in the City of Dover, which will benefit all Dover residents and businesses. REALTY TRANSFER TAX Delaware Code states that realty transfer tax realized by the City shall be segregated from the general fund and the funds shall be expended solely for the capital and operating costs of public safety services, economic development programs, public works services, capital projects and improvements, infrastructure projects and improvements and debt reduction. 230 146

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET JUNE 30, 2022 POLICE POLICE MUNICIPAL CDBG ARPA STATE SUBSTANCE REALTY FEDERAL STATE LIBRARY STREET HOUSING FUNDING D.O.T. ABUSE ERLSP LODGING TRANSFER GRANTS GRANTS GRANTS AID GRANTS GRANT GRANTS PREV. GRANT TAX TAX TOTALS ASSETS: Cash $ 34,598 $ 501,837 $ 213,162 $ - $ 21,707 $ 4,178,611 $ 114,487 $ 68,761 $ 163 $ 25,798 $ 33,449 $ 5,192,573 Receivables 268,732 - - - 2,299 - - - - 191 1,583 272,805 Prepaid items 3,958 - 734 - - - - - - - - 4,692 Due from other governments - - - - 24,736 - - - 26,162 - - 50,898 TOTAL ASSETS $ 307,288 $ 501,837 $ 213,896 $ - $ 48,742 $ 4,178,611 $ 114,487 $ 68,761 $ 26,325 $ 25,989 $ 35,032 $ 5,520,968 LIABILITIES AND FUND BALANCE: Liabilities: Vouchers Payable $ 12,000 $ 19,667 $ 24,888 $ - $ 7,036 $ 13,066 $ - $ 11,982 $ - $ - $ - $ 88,639 Unearned Revenue 55,572 189,615 - - - - - - - - - 245,187 Due to other funds-charges 226,479 224,988 - - 565 - - - 26,325 25,989 35,032 539,378 Due to other funds-temporary advances - - - - 40,000 - - - - - - 40,000 Total Liabilities 294,051 434,270 24,888 - 47,601 13,066 - 11,982 26,325 25,989 35,032 913,204 Fund Balances: Nonspendable 3,958 - 734 - - - - - - - - 4,692 Restricted 9,279 67,567 188,274 - 1,141 4,165,545 114,487 56,779 - - - 4,603,072 Total Fund Balances 13,237 67,567 189,008 - 1,141 4,165,545 114,487 56,779 - - - 4,607,764 TOTAL LIABILITIES AND FUND BALANCES $ 307,288 $ 501,837 $ 213,896 $ - $ 48,742 $ 4,178,611 $ 114,487 $ 68,761 $ 26,325 $ 25,989 $ 35,032 $ 5,520,968 231 147

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2022 POLICE POLICE MUNICIPAL CDBG ARPA STATE SUBSTANCE REALTY FEDERAL STATE LIBRARY STREET HOUSING FUNDING D.O.T. ABUSE PREV. ERLSP LODGING TRANSFER GRANTS GRANTS GRANTS AID GRANTS GRANT GRANTS GRANT TAX TAX TOTALS REVENUES: Grants received $ 484,309 $ 224,282 $ 383,389 $ 791,633 $ 340,502 $ 4,309,629 $ 520,975 $ 40,000 $ - $ - $ - $ 7,094,719 Recreation revenue - - - - - - - 25,593 - - - 25,593 Police fines - - - - - - - - 198,594 - - 198,594 Taxes - - - - - - - - - 355,742 3,901,105 4,256,847 Investment income (loss) 483 - - 716 - 7,602 652 - - - 1,065 10,518 TOTAL REVENUES 484,792 224,282 383,389 792,349 340,502 4,317,231 521,627 65,593 198,594 355,742 3,902,170 11,586,271 EXPENDITURES: Public Safety and Law Enforcement 104,590 162,472 - - - 95,275 - - - - - 362,337 Library Services - - 269,890 - - - - - - - - 269,890 Community and Economic Development - - - - 340,502 - - 117,104 - - - 457,606 Public Works - - - - - - 520,975 - - - - 520,975 TOTAL EXPENDITURES 104,590 162,472 269,890 - 340,502 95,275 520,975 117,104 - - - 1,610,808 Excess (deficiency) of revenues over (under) expenditures 380,202 61,810 113,499 792,349 - 4,221,956 652 (51,511) 198,594 355,742 3,902,170 9,975,463 OTHER FINANCING SOURCES (USES): Operating transfers-in 194,515 - - - - - - - - - - 194,515 Transfers-out (572,589) (61,810) - (792,349) - (56,411) - - (198,594) (355,742) (3,902,170) (5,939,665) Net Change in fund balances 2,128 - 113,499 - - 4,165,545 652 (51,511) - - - 4,230,313 FUND BALANCE AT BEGINNING OF YEAR 11,109 67,567 75,509 - 1,141 - 113,835 108,290 - - - 377,451 FUND BALANCE AT BEGINNING OF YEAR - Restated 11,109 67,567 75,509 - 1,141 - 113,835 108,290 - - - 377,451 FUND BALANCE AT END OF YEAR $ 13,237 $ 67,567 $ 189,008 $ - $ 1,141 $ 4,165,545 $ 114,487 $ 56,779 $ - $ - $ - $ 4,607,764 232 148

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE POLICE FEDERAL GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ - $ 15,137 $ 15,137 Interest earned - - 483 483 Grants received 830,000 830,000 485,955 (344,045) TOTAL REVENUES & BEGINNING BALANCE 830,000 830,000 501,575 (328,425) EXPENDITURES: Program expenses/supplies 404,000 389,000 85,501 (303,499) Training/Conference/Food/Travel 10,000 25,000 19,089 (5,911) Audit Fees 1,000 1,000 - (1,000) TOTAL EXPENDITURES 415,000 415,000 104,590 (310,410) Other financing sources and uses: Operating transfers - in - - 194,515 194,515 Operating transfers - out (415,000) (415,000) (572,589) (157,589) BALANCE CARRIED TO NEXT YEAR $ - $ - $ 18,911 $ 18,911 Fund Balance - Working Capital $ 18,911 GAAP Differences Deferred Revenue - non-spendable (5,674) Total Fund Balance $ 13,237 233 149

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE POLICE STATE GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ - $ 67,567 $ 67,567 Grants received 330,000 405,000 224,282 (180,718) TOTAL REVENUES & BEGINNING BALANCE 330,000 405,000 291,849 (113,151) EXPENDITURES: Program expenses/supplies 265,000 265,000 155,530 (109,470) Training/Conference/Food/Travel 15,000 90,000 6,942 (83,058) TOTAL EXPENDITURES 280,000 355,000 162,472 (192,528) Other financing uses: Operating transfers - out 50,000 50,000 61,810 11,810 BALANCE CARRIED TO NEXT YEAR $ - $ - $ 67,567 $ 67,567 234 150

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE LIBRARY GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ 75,510 $ 75,509 $ (1) Grants received: State 275,000 339,852 336,852 (3,000) Grants received: Other - 43,309 44,507 1,198 Grants received: Federal 2,700 2,700 2,030 (670) TOTAL REVENUES & BEGINNING BALANCE 277,700 461,371 458,898 (2,473) EXPENDITURES: Program expenditures/supplies (Fed Grant) 2,700 45,675 25,720 (19,955) Program expenditures/supplies (Other Grant) - 3,334 1,532 (1,802) Program expenditures/supplies (State Grant) 28,200 55,311 34,160 (21,151) Office Supplies 23,100 30,000 12,245 (17,755) Printing/duplicating 15,000 10,000 1,094 (8,906) Postage 100 100 68 (32) Books 125,000 162,855 98,424 (64,431) Furniture/Fixtures 5,000 33,289 12,697 (20,592) Audio visual supplies 67,700 93,320 72,315 (21,005) Training/conference/food/travel 3,000 5,000 2,788 (2,212) Office equipment repairs 1,900 3,355 838 (2,517) Office equipment lease 2,500 6,000 4,383 (1,617) Computer software 3,000 6,000 3,606 (2,394) Computer hardware 500 5,000 20 (4,980) TOTAL EXPENDITURES 277,700 459,239 269,890 (189,349) BALANCE CARRIED TO NEXT YEAR $ - $ 2,132 $ 189,008 $ 186,876 235 151

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE MUNICIPAL STREET AID FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 100 $ 100 $ - $ (100) State Grant - Operations 750,000 792,000 791,633 (367) Interest Earned - - 716 716 TOTAL REVENUES & BEGINNING BALANCE 750,100 792,100 792,349 249 Other financing uses: Operating transfers-out (750,000) (792,000) (792,349) (349) BALANCE CARRIED TO NEXT YEAR $ 100 $ 100 $ - $ (100) 236 152

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE HOUSING PROGRAMS - CDBG SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance CDBG $ 2,500 $ 2,013 $ 1,141 $ (872) Federal grant received 332,443 1,021,589 340,502 (681,087) TOTAL REVENUES & BEGINNING BALANCE 334,943 1,023,602 341,643 (681,959) EXPENDITURES: Closing Cost/Down Payment Program 100,000 211,347 146,711 64,636 Dover Interfaith Ministry 61,016 66,690 28,000 38,690 MHDC Emergency Home Repair 40,000 72,911 56,014 16,897 Milford Housing H/O Rehab 25,827 90,568 30,328 60,240 Central DE Housing Collaboration 20,600 20,600 22,253 (1,653) Cares Act COVID19 - 470,082 12,600 457,482 NCALL Research Demo 30,000 30,000 - 30,000 Administrative Expense 55,000 59,391 44,596 14,795 TOTAL EXPENDITURES 332,443 1,021,589 340,502 681,087 CDBG BALANCE CARRIED TO NEXT YEAR $ 2,500 $ 2,013 $ 1,141 $ 872 237 153

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE ARPA FUNDING GRANT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ - $ - $ - Grants received: Federal 4,309,600 4,309,600 4,309,629 29 Grants received: Federal - - 7,602 7,602 TOTAL REVENUES & BEGINNING BALANCE 4,309,600 4,309,600 4,317,231 7,631 EXPENDITURES: Program Expense and Supplies - - 14,000 14,000 Program Expense Housing - - 81,275 81,275 Transfer to General Fund 2,500,000 2,500,000 56,411 (2,443,589) TOTAL EXPENDITURES 2,500,000 2,500,000 151,686 2,348,314 BALANCE CARRIED TO NEXT YEAR $ 1,809,600 $ 1,809,600 $ 4,165,545 $ 2,355,945 CITY OF DOVER, DELAWARE STATE OF DELAWARE DEPARTMENT OF TRANSPORTATION GRANTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 312,400 $ 312,400 $ 113,835 $ (198,565) Grants received: State 483,400 634,300 520,975 (113,325) Interest earned - - 652 652 TOTAL REVENUES & BEGINNING BALANCE 795,800 946,700 635,462 (311,238) EXPENDITURES: Program expenditures grant related 596,500 747,400 520,975 (226,425) TOTAL EXPENDITURES 596,500 747,400 520,975 226,425 BALANCE CARRIED TO NEXT YEAR $ 199,300 $ 199,300 $ 114,487 $ (84,813) 238 154

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE SUBSTANCE ABUSE PREVENTION PROGRAM SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 83,700 $ 108,300 $ 108,290 $ (10) Grants revenue 28,000 40,000 40,000 - Recreation revenue 33,000 33,000 25,593 (7,407) TOTAL REVENUES & BEGINNING BALANCE 144,700 181,300 173,883 (7,417) EXPENDITURES: Temporary help/benefits 68,500 68,500 79,157 10,657 Program expenditures/supplies 35,000 35,000 37,947 2,947 TOTAL EXPENDITURES 103,500 103,500 117,104 13,604 BALANCE CARRIED TO NEXT YEAR $ 41,200 $ 77,800 $ 56,779 $ (21,021) CITY OF DOVER, DELAWARE ELECTRONIC RED LIGHT SAFETY PROGRAM SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ 100 $ 100 $ - $ (100) Grants received: State 400,000 250,000 198,594 (51,406) TOTAL REVENUES & BEGINNING BALANCE 400,100 250,100 198,594 (51,506) EXPENDITURES: Transfer to General Fund 400,000 250,000 198,594 (51,406) TOTAL EXPENDITURES 400,000 250,000 198,594 51,406 BALANCE CARRIED TO NEXT YEAR $ 100 $ 100 $ - $ (100) 239 155

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE LODGING TAX FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ - $ - $ - Lodging Tax Revenue 110,000 300,000 355,742 55,742 TOTAL REVENUES & BEGINNING BALANCE 110,000 300,000 355,742 55,742 EXPENDITURES: Transfer to General Fund 110,000 300,000 355,742 55,742 TOTAL EXPENDITURES 110,000 300,000 355,742 55,742 BALANCE CARRIED TO NEXT YEAR $ - $ - $ - $ - CITY OF DOVER, DELAWARE REALTY TRANSFER TAX FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN UNRESERVED FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) REVENUES: Beginning balance $ - $ - $ - $ - Realty Transfer Taxes 1,400,000 2,800,000 3,901,105 1,101,105 Interest earned - - 1,065 1,065 TOTAL REVENUES & BEGINNING BALANCE 1,400,000 2,800,000 3,902,170 1,102,170 EXPENDITURES: Transfer to General Fund 1,400,000 2,800,000 3,902,170 1,102,170 TOTAL EXPENDITURES 1,400,000 2,800,000 3,902,170 (1,102,170) BALANCE CARRIED TO NEXT YEAR $ - $ - $ - $ - 240 156

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. FINANCIAL SCHEDULES PROPRIETARY FUND TYPES ENTERPRISE FUNDS The following schedules pertaining to the major enterprise funds are not required under GAAP but are included for public review for budgetary compliance. Accordingly, no reconciliation to the GAAP financial statements is provided. ELECTRIC REVENUE FUND The Electric Revenue Fund accounts for all operating activity of the electric utility. This includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, purchased power cost, debt service, and transfers to other funds and the Improvement and Extension Fund. The Electric Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. The funds are combined for GAAP reporting purposes with assets capitalized. WATER FUND The Water Fund accounts for all operating activity of the Water Utility. This includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, debt service, and transfers to other funds and the Improvement and Extension Fund. The Water Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. 241 157

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. WASTEWATER FUND The Wastewater Fund accounts for all operating activity of the Wastewater Utility. This includes service revenues, investment earnings on operating accounts, direct and indirect operating expenses, debt service, and transfers to the other funds and the Improvement and Extension Fund. The Wastewater Improvement and Extension Fund is used to account for all capital project and equipment purchases. The City utilizes revenue and expenditure accounts to record capital project receipts, transfers from the operating fund, and project costs. The funds are combined for GAAP reporting purposes with assets capitalized. 242 158

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE ELECTRIC REVENUE FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 10,913,400 $ 23,127,100 $ 23,127,120 $ 20 Distribution of Earnings - PCA Credit (5,196,000) (5,196,000) (5,060,675) 135,325 5,717,400 17,931,100 18,066,445 135,345 REVENUES: Direct base sales 81,960,900 78,921,000 77,465,421 (1,455,579) Rental income 110,000 65,000 160,678 95,678 Miscellaneous services 538,000 690,700 447,997 (242,703) Utility tax 1,271,500 1,182,500 1,151,067 (31,433) Green Energy 127,000 127,000 132,007 5,007 Interest earned - operating 175,000 100,000 144,013 44,013 Transfer from Rate Stabilization 2,800,000 2,800,000 2,800,000 - Transfer from Other Funds (ERP) 75,000 75,000 75,000 - Total Revenues 87,057,400 83,961,200 82,376,183 (1,585,017) TOTAL BEGINNING BALANCE & REVENUES $ 92,774,800 $ 101,892,300 $ 100,442,628 $ (1,449,672) EXPENSES: Power Supply & Generation Hedged Energy $ 19,773,200 $ 19,773,200 $ 18,850,887 $ 922,313 Power Supply Management 634,800 634,800 634,800 - Capacity Charges 13,322,900 13,322,900 12,832,991 489,909 Dover Sun Park Energy 3,237,300 3,237,300 2,939,801 297,499 Solar Renewal Energy Credits 409,600 409,600 369,021 40,579 Renewable Energy Credits 1,300,000 1,500,000 1,440,000 60,000 RGGI 33,700 33,700 - 33,700 PJM Charges - Energy 5,508,400 6,008,400 6,829,498 (821,098) PJM Charges - Transmission & Fees 6,772,100 7,572,100 9,050,478 (1,478,378) Total Power Supply 50,992,000 52,492,000 52,947,476 (455,476) Plant Operations 2,219,500 2,219,500 2,508,740 (289,240) Generation Fuels 300,200 300,200 256,489 43,711 Capacity Credits (5,411,200) (5,411,200) (4,932,263) (478,937) PJM Spot Market Energy (366,200) (366,200) (404,321) 38,121 PJM Credits (87,000) (130,500) (520,621) 390,121 Total Generation (3,344,700) (3,388,200) (3,091,976) (296,224) Utility Tax 1,271,500 1,182,500 1,151,067 31,433 Administration 910,100 916,100 816,356 99,744 Transmission/Distribution 4,127,400 4,114,600 3,936,912 177,688 Electrical Engineering 1,419,600 1,375,400 1,290,351 85,049 Systems Operations 942,200 942,200 760,925 181,275 Meter Reading 389,400 389,400 360,103 29,297 Contractual Services - Power Supply 60,000 60,000 21,866 38,134 Legal Expenses 50,000 50,000 31,115 18,885 Bond Issue Costs 40,000 - - - Provision for Uncollectible 300,000 300,000 300,000 - Retirees Health Care 843,500 843,500 843,500 - Green Energy Grants 127,000 127,000 98,500 28,500 Bank & CC Fees 500,000 500,000 507,102 (7,102) Interest on Deposits 21,000 21,000 20,813 187 Interfund Service Fees 3,628,500 3,647,400 3,766,783 (119,383) Other Appropriations: Electric Capital Project Fund 3,711,100 2,359,000 2,359,000 - General Fund 11,000,000 11,000,000 11,000,000 - Debt Service 1,800,000 1,800,000 1,399,443 400,557 Rate Stabilization Fund 2,000,000 - - - Transfer to Other Reserve - - 33,507 (33,507) TOTAL EXPENSES 80,788,600 78,731,900 78,552,843 179,057 Budget Balance - Working Capital 11,986,200 23,160,400 21,889,785 1,270,615 TOTAL BUDGET BALANCE & EXPENSES $ 92,774,800 $ 101,892,300 $ 100,442,628 $ 1,449,672 243 159

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE ELECTRIC IMPROVEMENT AND EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Working Capital $ 22,581,700 $ 24,647,300 $ 24,647,349 $ 49 TOTAL BEGINNING BALANCES 22,581,700 24,647,300 24,647,349 49 REVENUES: Transfer from Electric Operating Fund 3,711,100 2,359,000 2,359,000 - Transfer from Depreciation Reserve 9,000,000 9,000,000 1,000,096 (7,999,904) Transfer from Future Capacity Reserve - 2,000,000 - (2,000,000) Federal Appropriation - 5,000,000 - (5,000,000) General Service Billing 400,000 650,000 1,084,477 434,477 Miscellaneous Receipts - - 51,736 51,736 Interest Earnings 185,500 85,500 116,797 31,297 Bond Issue Proceeds 8,575,200 - - - Total Revenues 21,871,800 19,094,500 4,612,106 (14,482,394) TOTAL BEGINNING BALANCES & REVENUES $ 44,453,500 $ 43,741,800 $ 29,259,455 $ (14,482,345) EXPENSES: Electric Administration $ 1,843,200 $ 910,900 $ 578,364 $ 332,536 Electric Generation 9,070,000 10,198,800 1,389,302 8,809,498 Transmission and Distribution 1,320,800 1,872,900 1,144,669 728,231 Electrical Engineering 8,952,300 9,930,000 1,609,552 8,320,448 ERP System 500,000 1,556,700 98,162 1,458,538 Total Expenses 21,686,300 24,469,300 4,820,049 19,649,251 Budget Balance - Improvement & Extension Fund 22,767,200 19,272,500 24,439,406 (5,166,906) Total Budget Balances - Working Capital 22,767,200 19,272,500 24,439,406 (5,166,906) TOTAL BUDGET BALANCES & EXPENSES $ 44,453,500 $ 43,741,800 $ 29,259,455 $ 14,482,345 244 160

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE WATER FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Water $ 642,000 $ 1,522,800 $ 1,522,881 $ 81 TOTAL BEGINNING BALANCES 642,000 1,522,800 1,522,881 81 REVENUES: Water Services 6,353,800 6,100,000 6,144,754 44,754 Miscellaneous service fees 104,600 30,000 105,605 75,605 Water tank space leasing 436,700 408,600 502,821 94,221 Interest - Water 34,000 8,900 16,244 7,344 Water Impact Fees 420,000 160,000 176,669 16,669 Total Revenues 7,349,100 6,707,500 6,946,093 238,593 TOTAL BEGINNING BALANCES & REVENUES $ 7,991,100 $ 8,230,300 $ 8,468,974 $ 238,674 EXPENSES: Engineering & Inspection $ 294,400 $ 306,300 $ 296,565 $ 9,735 Water Department 676,300 676,300 675,921 379 Water Treatment Plant 2,370,600 2,293,700 2,127,539 166,161 Interfund Service Fees 964,700 967,600 946,980 20,620 Retirees Health Care 192,000 192,000 192,000 - Debt Service - Water 762,800 762,800 775,704 (12,904) Bank & Credit Card Fees 27,000 27,000 22,589 4,411 Transfer To: Water Improvement and Extension 1,148,600 861,400 861,400 - General Fund from Water 500,000 500,000 500,000 - Electric Improvement and Extension 25,000 25,000 25,000 - Total Expenses 6,961,400 6,612,100 6,423,698 188,402 Budget Balance - Water 1,029,700 1,618,200 2,045,276 (427,076) Total Budget Balances - Working Capital 1,029,700 1,618,200 2,045,276 (427,076) TOTAL BUDGET BALANCES & EXPENSES $ 7,991,100 $ 8,230,300 $ 8,468,974 $ (238,674) 245 161

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE WATER IMPROVEMENT & EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance -Water $ 4,896,200 $ 4,763,800 $ 4,763,795 $ (5) TOTAL BEGINNING BALANCES 4,896,200 4,763,800 4,763,795 (5) REVENUES: State Loan Fund - Water - 370,000 370,000 - Interest earnings 50,000 50,000 63,398 13,398 Income from sale of assets - - 23,360 23,360 Transfer from Operating Fund - Water 1,148,600 861,400 861,400 - Transfer from Water Impact Fee Reserve 707,700 707,700 47,815 (659,885) Total Revenues 1,906,300 1,989,100 1,365,973 (623,127) TOTAL BEGINNING BALANCES & REVENUES $ 6,802,500 $ 6,752,900 $ 6,129,768 $ (623,132) EXPENSES: Water $ 1,729,000 $ 1,933,100 $ 1,787,771 $ 145,329 Water Engineering and Inspection - 200 114 86 Water Treatment Plant 177,300 179,200 27,596 151,604 Total Expenses 1,906,300 2,112,500 1,815,481 297,019 Budget Balance - Water 4,896,200 4,640,400 4,314,287 326,113 Total Budget Balances - Working Capital 4,896,200 4,640,400 4,314,287 326,113 TOTAL BUDGET BALANCES & EXPENSES $ 6,802,500 $ 6,752,900 $ 6,129,768 $ 623,132 #REF! #REF! #REF! #REF! 246 162

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE WASTEWATER FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance - Wastewater $ 1,672,200 $ 1,169,400 $ 1,169,441 41 TOTAL BEGINNING BALANCES 1,672,200 1,169,400 1,169,441 41 REVENUES: Wastewater Services 4,709,500 4,153,500 4,349,181 195,681 Wastewater Treatment Services 3,275,100 2,873,000 3,022,590 149,590 Groundwater inflow adjustment 2,023,100 2,023,100 2,013,793 (9,307) Miscellaneous service fees 200 200 17,683 17,483 State Grant - Wastewater 62,700 50,000 - (50,000) Interest - Wastewater 20,000 20,000 11,211 (8,789) Wastewater Impact Fees 380,000 162,700 176,978 14,278 Total Revenues 10,470,600 9,282,500 9,591,436 308,936 TOTAL BEGINNING BALANCES & REVENUES $ 12,142,800 $ 10,451,900 $ 10,760,877 $ 308,977 EXPENSES: Engineering & Inspection $ 393,700 $ 393,700 $ 301,738 $ 91,962 Wastewater Department 1,112,500 1,023,500 973,360 50,140 Debt Service - Wastewater 659,900 659,900 620,366 39,534 Retirees Health Care 93,000 93,000 93,000 - Kent County Treatment Charge 4,302,900 4,302,900 3,852,858 450,042 Interfund Service Fees 733,000 738,600 707,230 31,370 Bank & Credit Card Fees 12,000 12,000 7,658 4,342 Transfer To: General Fund from Wastewater 500,000 500,000 500,000 - Wastewater Improvement and Extension 799,200 799,200 799,200 - Electric Improvement and Extension 25,000 25,000 25,000 - Wastewater Impact Fee reserves - - 21,757 (21,757) Total Expenses 8,631,200 8,547,800 7,902,167 645,633 Budget Balance - Wastewater 3,511,600 1,904,100 2,858,710 (954,610) Total Budget Balances - Working Capital 3,511,600 1,904,100 2,858,710 (954,610) TOTAL BUDGET BALANCES & EXPENSES $ 12,142,800 $ 10,451,900 $ 10,760,877 $ (308,977) 247 163

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE WASTEWATER IMPROVEMENT & EXTENSION FUND SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) Beginning Balance -Wastewater $ 892,700 $ 1,200,800 $ 1,200,837 37 TOTAL BEGINNING BALANCES 892,700 1,200,800 1,200,837 37 REVENUES: State Loan Fund - Wastewater - 248,500 248,450 (50) Transfer from Operating Fund - Wastewater 799,200 799,200 799,200 - Transfer from Wastewater Impact Fee Reserve 22,000 44,100 44,100 - Interest earnings 10,000 10,000 27,861 17,861 Total Revenues 831,200 1,101,800 1,119,611 17,811 TOTAL BEGINNING BALANCES & REVENUES $ 1,723,900 $ 2,302,600 $ 2,320,448 $ 17,848 EXPENSES: Wastewater Engineering $ - $ 200 $ 114 $ 86 Wastewater 831,200 1,513,800 1,197,912 315,888 Total Expenses 831,200 1,514,000 1,198,026 315,974 Budget Balance - Wastewater 892,700 788,600 1,122,422 (333,822) Total Budget Balances - Working Capital 892,700 788,600 1,122,422 (333,822) TOTAL BUDGET BALANCES & EXPENSES $ 1,723,900 $ 2,302,600 $ 2,320,448 $ (17,848) 0 0 0 35,696 248 164

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. FINANCIAL SCHEDULES PROPRIETARY FUND TYPES INTERNAL SERVICE FUNDS WORKERS’ COMPENSATION INSURANCE FUND The City has created this fund to account for the revenues and expenses related to a self-insured Workers’ Compensation Fund. The revenues are received from the City's various funds. These funds contribute to the Workers’ Compensation Fund an amount based on salaries at a pre- determined assessment rate. Claims paid, reinsurance cost and third-party administrator's fees are charged to this fund. Budgetary schedule is included for public review of budgetary compliance. 249 165

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. CITY OF DOVER, DELAWARE WORKERS' COMPENSATION SCHEDULE OF REVENUES AND EXPENSES BUDGET (NON-GAAP BASIS) AND ACTUAL YEAR ENDED JUNE 30, 2022 VARIANCE ORIGINAL FINAL POSITIVE BUDGET BUDGET ACTUAL (NEGATIVE) OPERATING REVENUES: Beginning Balance $ 1,803,600 $ 1,803,600 $ 3,030,388 $ 1,226,788 Interest Earned 28,500 28,500 (54,750) (83,250) City Contribution 993,500 788,700 979,823 191,123 TOTAL REVENUES $ 2,825,600 $ 2,620,800 $ 3,955,461 $ 1,334,661 OPERATING EXPENSES: Program Expenses $ 480,000 $ 285,000 $ 155,014 $ 129,986 Contractual Services 25,000 15,000 9,197 5,803 Insurance 145,000 173,700 166,952 6,748 State of Delaware - Self-Insurance Tax 39,000 39,000 26,888 12,112 TOTAL EXPENSES $ 689,000 $ 512,700 $ 358,051 $ 154,649 BUDGET BALANCE - CARRY FORWARD $ 2,136,600 $ 2,108,100 $ 3,597,410 $ (1,489,310) 250 166

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. FINANCIAL STATEMENTS FIDUCIARY FUND TYPES PENSION AND OTHER EMPLOYEE BENEFIT TRUSTS POLICE PENSION, EMPLOYEE PENSION, AND OTHER POST-EMPLOYMENT BENEFIT (OPEB) These trust funds account for resources that are required to be held in trust for the members and beneficiaries of the City’s defined benefit pension plans, defined contribution plan, and other post- employment benefit plan. City of Dover, Delaware Combining Statement of Net Position Fiduciary Funds Police Employee OPEB Total Pension and Pension Pension Trust OPEB Benefit Trust Trust Fund Trust Funds Assets Cash and Cash Equivalents $ 1,838,086 $ 6,307,897 $ 3,162,308 $ 11,308,291 Investments at Fair Value - Mutual Funds 12,967,347 41,774,955 45,629,719 100,372,021 Total Assets $ 14,805,433 $ 48,082,852 $ 48,792,027 $ 111,680,312 Liabilities Vouchers Payable & Deposit Payable 1,687 6,035 449,209 456,931 Total Liabilities 1,687 6,035 449,209 456,931 Net Position Net Position Restricted for Pensions 14,803,746 48,076,817 62,880,563 Net Position Restricted for Health Benefits 48,342,818 48,342,818 Total Net Position $ 14,803,746 $ 48,076,817 $ 48,342,818 $ 111,223,381 The notes to financial statements are an integral part of this statement. 251 167

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. Statement of Changes in Net Position Fiduciary Funds For the Year Ended June 30, 2022 Police Employees' OPEB Pension and Other Pension Pension Trust Postemployment Trust Trust Fund Benefit Trust Funds Additions: Net Investment Income $ (2,441,617) $ (7,865,542) $ (8,960,325) $ (19,267,484) City's Contribution-Payroll Based - 3,248,190 757,785 4,005,975 City's Contribution-Lump Sum 615,200 1,234,300 3,284,500 5,134,000 Employee Contribution - 171,257 - 171,257 State Grants 668,521 - - 668,521 Other 3,341 - - 3,341 Total Additions (1,154,555) (3,211,795) (4,918,040) (9,284,390) Deductions: Benefit Payments 1,517,334 4,561,451 2,902,867 8,981,652 General Administration 11,987 51,795 7,500 71,282 Total Deductions 1,529,321 4,613,246 2,910,367 9,052,934 Change in Net Position (2,683,876) (7,825,041) (7,828,407) (18,337,324) Net Position - Beginning 17,487,622 55,901,858 56,171,225 129,560,705 Net Position - Ending $ 14,803,746 $ 48,076,817 $ 48,342,818 $ 111,223,381 The notes to financial statements are an integral part of this statement. 252 168

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. FINANCIAL STATEMENTS FIDUCIARY FUND TYPES CUSTODIAL FOURTH OF JULY CELEBRATION COMMITTEE The Fourth of July Celebration Committee is designed to provide recreation enjoyment and educational events commemorating the birth of our nation. DOVER DAYS CELEBRATION COMMITTEE The Dover Days Celebration Committee was established to fund the annual Old Dover Days Festival; one of Delaware’s largest and longest-running free events dedicated to promoting our state’s heritage and culture. DOVER STRONG The Dover Strong Fund was formed to widen eligibility for charitable contributions and grants to benefit the City of Dover and its parks, grounds, beautification efforts, education, the arts, and community development. 253 169

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Financial Section – Part E – Supplementary Information Item 5. City of Dover, Delaware Combining Statement of Net Position Custodial Funds For the Year Ended June 30, 2022 4th of July Dover Day's Total Custodial Celebration Celebration Dover Strong Funds Assets Cash and Cash Equivalents $ 3,574 $ 15,859 $ 9,825 $ 29,258 Prepaid Expenses 25,000 - - 25,000 Total Assets 28,574 15,859 9,825 54,258 Net Position Net Position Restricted for Other Organizations 28,574 15,859 9,825 54,258 Total Net Position $ 28,574 $ 15,859 $ 9,825 $ 54,258 City of Dover, Delaware Combining Statement of Changes in Net Position Custodial Funds For the Year Ended June 30, 2022 4th of July Dover Day's Total Custodial Celebration Celebration Dover Strong Funds Additions: Gifts/Donations $ 22,390 $ 14,250 $ 7,500 $ 44,140 General Fund Contributions - - 6,000 6,000 Interest Income 23 - - 23 Total Additions 22,413 14,250 13,500 50,163 Deductions: Supplies/Materials 209 4,038 1,175 5,422 Bank Fees 199 - - 199 Contractual Services 19,020 19,450 - 38,470 Transfer to Governmental Capital Project Fund - - 2,500 2,500 Total Deductions 19,428 23,488 3,675 46,591 Change in Net Position 2,985 (9,238) 9,825 3,572 Net Position - Beginning 25,589 25,097 - 50,686 Net Position - Ending $ 28,574 $ 15,859 $ 9,825 $ 54,258 254 170

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Item 5. STATISTICAL SECTION This section of the City of Dover’s Annual Comprehensive Financial Report represents detailed information as a context for understanding what the statements, note disclosures, and required supplementary information says about the Government’s overall financial health. 255 171

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2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Item 5. STATISTICAL SECTION This part of the City of Dover’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. FINANCIAL TRENDS These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. REVENUE CAPACITY These schedules contain information to help the reader assess the City’s most significant local revenue source, property tax. DEBT CAPACITY These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. OPERATING INFORMATION These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. 257 173

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 1 City of Dover, Delaware Net Position by Component Last Ten Fiscal Years (Accrual basis of accounting) Fiscal Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Governmental Activities Net investment in capital assets $ 52,211,316 $ 52,937,055 $ 56,266,299 $ 54,309,740 $ 53,239,906 $ 54,350,984 $ 54,325,174 $ 51,485,408 $ 50,738,483 $ 49,577,021 Restricted 4,675,182 431,347 346,826 342,285 961,101 306,474 932,728 556,553 612,054 721,682 Unrestricted 6,821,368 (8,310,569) (23,727,242) (29,348,340) (36,772,282) (44,105,399) (22,214,284) (27,947,709) (7,142,570) (4,791,553) Total governmental activities net position 63,707,866 45,057,833 32,885,883 25,303,685 17,428,725 10,552,059 33,043,618 24,094,252 44,207,967 45,507,150 Business-type activities Net investment in capital assets 102,312,686 101,595,410 104,913,375 109,497,296 111,894,357 110,779,002 110,647,045 108,565,514 101,670,949 100,079,972 Restricted 70,355,786 74,090,261 70,998,294 54,353,211 46,693,086 44,176,110 37,026,527 36,751,850 36,123,755 34,665,736 Unrestricted 31,213,588 30,298,138 20,778,570 17,850,066 22,683,806 21,086,446 26,876,166 21,732,221 36,098,998 39,534,763 Total business-type activities net position 203,882,060 205,983,809 196,690,239 181,700,573 181,271,249 176,041,558 174,549,738 167,049,585 173,893,702 174,280,471 Primary government Net investment in capital assets 154,524,002 154,532,465 161,179,674 163,807,036 165,134,263 165,129,986 164,972,219 160,050,922 152,409,432 149,656,993 Restricted 75,030,968 74,521,608 71,345,120 54,695,496 47,654,187 44,482,584 37,959,255 37,308,403 36,735,809 35,387,418 Unrestricted 38,034,956 21,987,569 (2,948,672) (11,498,274) (14,088,476) (23,018,953) 4,661,882 (6,215,488) 28,956,428 34,743,210 Total primary government net position $ 267,589,926 $ 251,041,642 $ 229,576,122 $ 207,004,258 $ 198,699,974 $ 186,593,617 $ 207,593,356 $ 191,143,837 $ 218,101,669 $ 219,787,621 NOTE The fiscal years prior to 2015 show fund balances as they were reported prior to GASB No. 68. The Change in Net Position for fiscal 2017 includes a prior period adjustment for the OPEB Liability associated with GASB No. 74 & 75. 174 258

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 2 City of Dover, Delaware Changes in Net Position Last Ten Fiscal Years (Accrual basis of accounting) Fiscal Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Expenses Governmental activities: General government $ 3,957,743 $ 3,620,325 $ 4,190,000 $ 3,296,331 $ 3,443,595 $ 3,456,943 $ 4,648,999 $ 3,374,955 $ 1,288,977 $ 1,474,045 Public safety 15,419,359 15,074,030 19,670,023 17,597,828 17,441,023 14,947,553 19,919,050 21,336,042 19,219,986 17,989,463 Public works 8,110,459 7,981,115 4,464,952 6,183,329 7,736,355 6,942,760 7,381,557 3,848,402 6,594,829 6,099,484 Library and recreation 3,313,073 2,613,161 3,736,306 3,211,586 3,106,031 2,866,441 2,183,802 3,079,426 2,942,800 2,313,048 Community and economic development 607,606 1,023,086 531,306 461,983 513,857 449,356 551,879 444,474 676,554 939,966 Central services 457,123 641,781 626,259 521,020 589,846 473,498 483,426 443,072 512,586 454,816 Financial administration 817,314 911,780 886,495 894,670 964,051 746,714 1,249,012 1,247,976 1,368,048 1,122,830 Other post-employment benefits - - - - - - - - 3,348,267 5,119,778 Interest on long-term debt 185,468 180,781 132,711 178,514 129,723 118,275 118,565 174,912 122,812 114,785 Total governmental activities expenses 32,868,145 32,046,059 34,238,052 32,345,262 33,924,481 30,001,540 36,536,290 33,949,259 36,074,859 35,628,215 Business-type activities Water 5,269,522 4,354,130 4,872,473 12,604,448 11,728,740 11,416,394 11,925,299 11,322,958 11,397,992 10,905,358 Wastewater 7,398,502 8,183,518 7,326,224 Electric 71,680,359 63,109,318 64,054,118 68,459,581 72,553,319 62,992,850 61,054,151 67,562,077 74,481,048 74,595,585 Total business-type activities 84,348,383 75,646,966 71,380,342 81,064,029 84,282,059 74,409,244 72,979,450 78,885,035 85,879,040 85,500,943 Total primary government expenses 117,216,528 107,693,025 105,618,394 113,409,291 118,206,540 104,410,784 109,515,740 112,834,294 121,953,899 121,129,158 Program Revenues Governmental activities: Charges for services: General government 3,087,530 2,607,533 2,571,127 2,520,022 2,456,576 2,362,123 2,336,389 2,116,233 2,137,574 2,463,437 Public safety 4,232,464 3,822,417 3,636,312 4,510,464 5,367,450 5,171,989 4,920,783 4,558,200 4,676,162 4,240,847 Public works 3,575,614 3,125,135 3,080,960 3,068,399 3,714,187 2,514,645 2,527,478 2,578,892 2,595,648 2,624,877 Library and recreation 414,787 146,402 457,674 612,737 640,061 602,873 667,996 696,179 699,622 656,001 Operating grants and contributions 8,337,088 3,453,829 3,587,007 2,441,900 2,190,146 2,025,522 2,759,367 2,298,936 2,159,616 2,914,696 Capital grants and contributions 619,475 191,367 571,817 372,136 344,561 360,538 675,784 166,379 1,226,559 2,107,444 Total governmental activities program revenues 20,266,958 13,346,683 13,904,897 13,525,658 14,712,981 13,037,690 13,887,797 12,414,819 13,495,181 15,007,302 (Continued) 175 259

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. (Table 2 Continued - Changes in Net Position) Fiscal Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Program Revenues Business-type activities: Charges for services: Water * 7,086,239 6,693,676 6,152,724 16,017,306 16,319,193 16,054,096 14,976,213 14,875,806 13,268,213 13,387,706 Wastewater * 9,783,269 9,507,205 8,754,314 Electric 80,782,417 79,820,816 81,488,206 83,709,415 83,883,757 83,655,870 80,695,910 79,802,674 79,489,192 90,685,693 Capital contributions - - 1,409,145 - - 1,201,963 44,955 1,516,932 401,947 - Total business-type activities program revenues 97,651,925 96,021,697 91,651,665 99,726,721 100,202,950 100,911,929 95,717,078 96,195,412 93,159,352 104,073,399 Total primary government program revenues 117,918,883 109,368,380 105,556,562 113,252,379 114,915,931 113,949,619 109,604,875 108,610,231 106,654,533 119,080,701 Net (expense)/revenue: Governmental activities (12,601,187) (18,699,376) (20,333,155) (18,819,604) (19,211,500) (16,963,850) (22,648,493) (21,534,440) (22,579,678) (20,620,913) Business-type activities 13,303,542 20,374,731 21,551,574 18,662,692 15,920,891 26,502,685 22,737,628 17,310,377 7,280,312 18,572,456 Total primary government net revenue (expense) 702,355 1,675,355 1,218,419 (156,912) (3,290,609) 9,538,835 89,135 (4,224,063) (15,299,366) (2,048,457) General Revenues and Other Changes in Net Position Governmental activities: Property taxes 15,370,628 14,892,966 14,796,554 13,448,025 13,065,098 12,895,597 12,846,774 11,176,763 11,094,479 11,126,395 Transfer taxes 4,256,847 4,962,557 1,825,438 1,637,194 2,022,165 1,634,707 2,191,915 1,713,505 1,543,626 1,107,686 Investment earnings (351,255) 15,803 551,771 809,345 100,903 132,228 263,667 92,479 142,390 36,793 Transfers 11,975,000 11,000,000 10,741,590 10,800,000 10,900,000 10,875,000 16,295,503 10,500,000 8,500,000 10,491,718 Total governmental activities 31,251,220 30,871,326 27,915,353 26,694,564 26,088,166 25,537,532 31,597,859 23,482,747 21,280,495 22,762,592 Business-type activities: Investment earnings (3,430,291) 399,058 4,179,682 3,752,939 208,800 379,160 1,058,028 544,624 832,919 112,402 Loss on Sale of Assets - (480,219) - - - - - - - - Transfers (11,975,000) (11,000,000) (10,741,590) (10,800,000) (10,900,000) (10,875,000) (16,295,503) (10,500,000) (8,500,000) (10,491,718) Prior Period Adj. Net Pension Liability - - - Total business-type activities (15,405,291) (11,081,161) (6,561,908) (7,047,061) (10,691,200) (10,495,840) (15,237,475) (9,955,376) (7,667,081) (10,379,316) Total primary government 15,845,929 19,790,165 21,353,445 19,647,503 15,396,966 15,041,692 16,360,384 13,527,371 13,613,414 12,383,276 Change in Net Position Government activities 18,650,033 12,171,950 7,582,198 7,874,960 6,876,666 8,573,682 8,949,366 1,948,307 (1,299,183) 2,141,679 Business-type activities (2,101,749) 9,293,570 14,989,666 11,615,631 5,229,691 16,006,845 7,500,153 7,355,001 (386,769) 8,193,140 Total primary government $ 16,548,284 $ 21,465,520 $ 22,571,864 $ 19,490,591 $ 12,106,357 $ 24,580,527 $ 16,449,519 $ 9,303,308 $ (1,685,952) $ 10,334,819 NOTE The Change in Net Position for fiscal 2015 includes a prior period adjustment for the Net Pension Liability associated with GASB No. 68. The Change in Net Position for fiscal 2017 includes a prior period adjustment for the OPEB Liability associated with GASB No. 74 & 75. * In FY20, management began reporting the Water and Wastewater funds separately. 176 260

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 3 City of Dover, Delaware Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified accrual basis of accounting) Fiscal Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 General fund Non-spendable $ 375,393 $ 117,139 $ 212,467 $ 234,974 $ 259,258 $ 187,294 $ 195,134 $ 202,620 $ 207,884 $ 227,457 Restricted 67,418 53,896 38,989 27,070 10,572 7,979 173,769 127,706 129,476 131,237 Committed 2,163,317 2,111,592 2,145,574 1,047,987 1,111,182 2,441,641 1,059,197 1,041,130 723,300 936,899 Assigned 7,809,060 6,540,786 4,823,060 4,320,615 2,865,373 1,956,061 2,735,602 3,839,571 3,163,431 3,519,012 Unassigned 12,587,231 10,316,753 6,383,591 7,118,240 7,722,505 5,528,605 4,995,522 3,991,442 3,435,079 3,391,714 Total general fund 23,002,419 19,140,166 13,603,681 12,748,886 11,968,890 10,121,580 9,159,224 9,202,469 7,659,170 8,206,319 All other governmental funds Special revenue funds Non-spendable 4,692 - - - 9,990 3,993 350 181 2,447 - Restricted 4,603,072 377,451 307,837 315,215 950,529 298,495 758,959 428,847 482,578 590,445 Assigned - - - - - - - - - 123,349 Total all other governmental funds 4,607,764 377,451 307,837 315,215 960,519 302,488 759,309 429,028 485,025 713,794 Total fund balances $ 27,610,183 $ 19,517,617 $ 13,911,518 $ 13,064,101 $ 12,929,409 $ 10,424,068 $ 9,918,533 $ 9,631,497 $ 8,144,195 $ 8,920,113 177 261

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 4 City of Dover, Delaware Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified accrual basis of accounting) Fiscal Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Revenues Fines $ 706,674 $ 709,808 $ 901,197 $ 1,020,920 $ 1,121,135 $ 1,142,722 $ 1,128,211 $ 1,161,876 $ 1,011,156 $ 912,004 Library revenue 260,589 78,996 329,501 410,154 392,108 380,561 419,677 480,823 498,553 471,065 Licenses and permits 3,100,889 2,906,024 2,554,826 2,866,796 3,786,167 3,548,401 3,525,992 2,893,990 2,952,015 2,548,913 Sanitation fees and rebates 3,371,689 3,125,135 3,080,960 3,068,399 3,133,360 2,514,645 2,527,478 2,578,892 2,595,648 2,624,877 Recreation 25,593 20,915 43,203 61,147 87,125 53,301 65,145 66,038 49,144 40,446 Miscellaneous services 1,882,688 871,521 1,319,371 1,672,401 2,210,980 1,679,390 1,874,534 1,650,153 1,831,683 2,470,200 Taxes 19,545,617 19,702,590 16,584,028 15,103,449 15,125,329 14,564,304 15,085,481 12,930,532 12,655,035 12,333,520 Grants 8,956,563 3,645,196 4,307,401 2,814,036 2,534,707 2,386,060 3,449,238 2,489,239 3,416,319 5,119,089 Court of chancery fees 2,095,840 1,834,620 1,602,360 1,588,140 1,496,520 1,343,020 1,239,300 1,118,680 1,034,460 917,700 Investment income (296,506) 7,794 475,051 730,797 93,751 123,234 234,885 77,769 122,490 45,198 Total revenues 39,649,636 32,902,599 31,197,898 29,336,239 29,981,182 27,735,638 29,549,941 25,447,992 26,166,503 27,483,012 Expenditures General government 1,749,343 1,937,056 1,770,930 1,760,851 1,710,100 2,026,568 2,116,749 1,425,786 1,271,523 1,107,122 Library services 1,993,407 1,857,652 2,108,269 1,971,773 1,981,201 1,926,561 1,720,021 1,675,989 1,697,982 5,514,217 Public safety 23,105,606 21,854,945 22,423,765 22,558,701 21,018,381 21,248,561 21,240,506 20,218,519 19,130,832 18,048,642 Public works 4,090,308 2,978,829 3,064,579 2,855,382 1,918,473 2,119,186 2,146,917 1,708,658 2,572,965 1,758,405 Recreational services 1,157,441 1,126,313 1,754,771 1,087,393 821,613 733,961 783,976 865,938 683,363 651,341 Streets and sanitation services 3,762,686 3,616,943 3,979,021 4,458,329 4,637,145 4,275,648 6,081,813 6,574,262 4,634,091 2,990,430 Engineering services 191,358 204,843 209,197 266,332 263,930 219,198 166,579 26,996 - - Financial administration 783,575 791,540 815,956 754,400 762,860 764,622 919,086 979,112 1,002,539 909,877 Garage and stores 853,904 771,974 742,353 492,111 499,289 501,559 465,843 419,597 415,593 431,542 Insurance 388,361 343,044 376,584 276,689 302,258 295,923 280,901 278,682 272,895 241,395 Retiree health care lump sum 2,156,000 2,045,400 1,894,900 1,894,900 2,063,000 2,039,700 1,567,700 1,636,500 1,636,500 1,620,600 Employee pension unfunded liability 1,234,300 - - - 619,000 - 594,300 543,000 121,000 1,693,500 Street lights 826,038 815,961 807,794 805,185 803,924 811,992 804,246 775,197 774,533 878,760 Community and economic development 607,606 1,023,086 531,306 461,983 513,857 449,356 551,879 444,474 676,554 939,966 (Continued) 178 262

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 4 (Continued) - Changes in Fund Balances of Governmental Funds Fiscal Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Expenditures Debt service Principal $ 487,315 $ 335,760 $ 328,716 $ 322,745 $ 332,355 $ 573,497 $ 553,824 $ 848,069 $ 429,239 $ 296,003 Interest 144,822 156,154 135,352 34,773 128,455 118,771 118,565 114,243 122,812 73,071 Other charges (issuance of debt) - - - - - - - 60,668 - 1,029 Total expenditures 43,532,070 39,859,500 40,943,493 40,001,547 38,375,841 38,105,103 40,112,905 38,595,690 35,442,421 37,155,900 Excess of revenues over(under) expenditures (3,882,434) (6,956,901) (9,745,595) (10,665,308) (8,394,659) (10,369,465) (10,562,964) (13,147,698) (9,275,918) (9,672,888) Other financing sources (uses) Bond proceeds - 1,563,000 - 5,700,000 - - - 4,135,000 - 2,648,500 Transfers in 17,939,665 17,257,640 14,277,336 13,953,381 14,220,407 13,885,445 14,339,821 13,500,366 11,458,445 12,666,208 Transfers out (5,964,665) (6,257,640) (3,535,746) (3,153,381) (3,320,407) (3,010,445) (3,489,821) (3,000,366) (2,958,445) (2,174,490) Payments to refunded bond escrow agent - - - (5,700,000) - - - - - - Total other financing sources (uses) 11,975,000 12,563,000 10,741,590 10,800,000 10,900,000 10,875,000 10,850,000 14,635,000 8,500,000 13,140,218 Net change in fund balances $ 8,092,566 $ 5,606,099 $ 995,995 $ 134,692 $ 2,505,341 $ 505,535 $ 287,036 $ 1,487,302 $ (775,918) $ 3,467,330 Debt service as a percentage of noncapital expenditures 1.57% 1.30% 1.34% 0.99% 0.94% 1.30% 2.14% 2.06% 2.76% 1.81% Capital outlay included in total expenditures (1) $ 3,324,372 $ 1,959,010 $ 6,190,215 $ 3,993,940 $ 2,066,950 $ 2,973,131 $ 5,753,588 $ 7,500,186 $ 3,777,578 $ 4,872,122 NOTES (1) Capital outlay has been included in functional expenditures. Debt service as a percentage of non-capital expenditures excludes capital outlay expenditures. 179 263

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 5 City of Dover, Delaware Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (accrual basis of accounting) Fiscal Property Transfer Year Tax Tax Total 2022 $ 15,288,770 $ 4,256,847 $ 19,545,617 2021 14,740,033 4,962,557 19,702,590 2020 14,758,590 1,825,438 16,584,028 2019 13,448,025 1,637,194 15,085,219 2018 13,065,098 2,022,165 15,087,263 2017 12,895,597 1,634,707 14,530,304 2016 12,846,772 2,191,915 15,038,687 2015 11,176,763 1,713,788 12,890,551 2014 11,094,479 1,543,626 12,638,105 2013 11,126,395 1,107,686 12,234,081 NOTES 1. Property Tax rate of $.4150 per $100 of 100% assessed value (See Table 6 for tax rates). Revenues include payments in lieu of taxes, farm land roll back and penalties. 2. Transfer Taxes equal 1.5% of the real property sales value. 264 180

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 6 City of Dover, Delaware Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years REAL PROPERTY Ratio of Direct Less: Total Taxable Tax Fiscal Total Assessed Exempt Total Taxable Estimated Value to Total Rate Year Value Properties Assessed Value Actual Value Assessed Value Per $100 2022 $ 4,968,509,765 $ 1,383,980,400 $ 3,584,529,365 $ 4,968,509,765 72.14% 0.4150 2021 4,964,063,500 1,383,980,400 3,580,083,100 4,964,063,500 72.12% 0.4050 2020 4,617,529,500 1,343,536,900 3,273,992,600 4,617,529,500 70.90% 0.4400 2019 4,600,542,300 1,342,452,800 3,258,089,500 4,600,542,300 70.82% 0.4050 2018 4,553,536,100 1,338,792,000 3,214,744,100 4,553,536,100 70.60% 0.4050 2017 4,493,113,000 1,336,802,000 3,156,311,000 4,493,113,000 70.25% 0.4050 2016 4,443,188,600 1,335,276,500 3,107,912,100 4,443,188,600 69.95% 0.4050 2015 4,584,108,050 1,376,954,490 3,207,153,560 4,584,108,050 69.96% 0.3378 2014 4,525,547,960 1,365,654,100 3,159,893,860 4,525,547,960 69.82% 0.3378 2013 4,510,303,860 1,328,807,500 3,181,496,360 4,510,303,860 70.54% 0.3378 Source: Tax Assessor's Office, City of Dover. NOTES 1. There is no tax on personal properties. Therefore, no figures are presented. 2. In 2015, the City property values were reassessed, effective for tax year 2016. The tax rate was increased from $ .3378 to $ .4050 per $100. Had the tax rate been rolled back to a revenue neutral rate, the rate would have been $ .3499 per $100. The revised rate represents a $ .0672 increase. 3. In 2020, the City property tax rate was increased from $0.4050 to $0.4400 per $100. The revised rate represents a $0.0350 increase. 4. In 2021, the City property tax rate was decreased from $0.4400 to $0.4050 per $100. The revised rate represents a $0.0350 decrease. 5. In 2022, the City property tax rate was increased from $0.4050 to $0.4150 per $100. The revised rate represents a $0.01 increase. 265 181

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 7 City of Dover, Delaware Property Tax Rates - All Direct and Overlapping Governments with the Capital School District NOTES NOTES (Per $100 of Assessed Value) 1. Section Last Ten Fiscal Years 1. Section 48 48 of of the the City City of of Dover Dover charter charter provides provides that that the the amount amount ofof money money toto be be raised raised through through property property taxes taxes shall shall not not exceed exceed 2% 2% of of the the total total taxable taxable assessment. assessment. Direct Overlapping City Capital Vo-Tech Total 2. 2. Kent Kent County County Property Property tax tax rates reflect Fiscal of Kent School School Direct & rates reflect the the 1987 1987 Year Dover County District District Overlapping reappraisal reappraisal of of properties properties inin Kent Kent County. County. 2022 0.4150 0.3000 2.2841 0.1571 3.1562 3. 3. In In 2015, 2015, the the City City property property 2021 0.4050 0.3000 2.2841 0.1571 3.1462 values values were were reassessed, reassessed, 2020 0.4400 0.3000 2.1897 0.1578 3.0875 effective effective for for tax tax year year 2016. 2016. 2019 0.4050 0.3000 1.8307 0.1541 2.6898 Tax Tax raterate increased increased to to 2018 0.4050 0.3000 1.7942 0.1522 2.6514 $.4050. $.4050. 2017 0.4050 0.3000 1.8065 0.1484 2.6599 4. 2016 0.4050 0.3000 1.8115 0.1415 2.6580 4. In In 2020, 2020, the the City City Tax Tax rate rate increased 2015 0.3378 0.3000 1.8215 0.1372 2.5965 increased to to $.4400. $.4400. 2014 0.3378 0.3000 1.8500 0.1372 2.6250 5. 5. In In 2021, 2021, the the City City Tax Tax rate rate 2013 0.3378 0.3000 1.9090 0.1372 2.6840 decreased decreased to to $.4050. $.4050. 6. In 2022, the City Tax rate Sources: Tax Assessor's Office - City increased to $.4150 Receiver of Taxes Office - Kent County Property Tax Rates - FY 2022 All Direct & Overlapping Governments Vo-Tech School 5% City of Dover 13% Kent County 10% Capital School 72% City of Dover Kent County Capital School Vo-Tech School 266 182

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 8 Principal Tax Payers Current Year and Nine Years Ago PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL 2022 TAXABLE 2013 TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAX PAYERS VALUATION RANK VALUATION VALUATION RANK VALUATION GLP Capital LP* $82,417,900 1 1.66% $82,025,600 1 2.59% Dover Mall LP/Dover Commons 61,564,100 2 1.24% 80,921,800 2 2.55% Dover International Speedway Inc* 60,506,200 3 1.22% 64,822,000 1 2.05% Blue Hen Apt LLC 35,842,700 4 0.72% - - - Leander Lakes LLC 24,571,900 5 0.49% - - - Medcore Realty Eden Hill LLC 24,018,100 6 0.48% 27,270,100 3 0.86% Kraft-General Foods Corp. 23,505,400 7 0.47% 19,565,300 5 0.62% CW Dover LLC 21,140,300 8 0.43% 25,035,100 4 0.79% Onix Dover LLC 16,860,500 9 0.34% - - - GM Country Club LLC 15,946,800 10 0.32% 13,176,500 8 0.42% Millers Dover Downs - - - 13,463,600 7 0.42% Dover Bay Court Plaza - - - 14,400,000 6 0.45% McKee Road Business Park LLC - - - 12,774,400 9 0.40% Multi-Residential -M LLC - - - 12,396,200 10 0.39% Source: Tax Assessor's Office, City of Dover $366,373,900 Total taxable assessed valuation for current year is $ 4,964,063,500 Total taxable assessed valuation for ten years ago is $ 3,169,307,760 *In 2012, Dover Downs race track and hotel properties were reported as one entity, in 2021 they are reported separately. 267 183

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 9 City of Dover, Delaware Property Tax Levies and Collections Last Ten Fiscal Years Total Collected Within Collection Collected in Total Collection Fiscal Tax the Fiscal Year as Percentage Subsequent Collections as Percentage Year Levy of the Levy of Levy Years to Date of Levy 2022 $ 14,646,665 $ 14,655,663 100.1% $ - $ 14,655,663 100.1% 2021 14,286,063 14,248,670 99.7% 48,162 14,296,832 100.1% 2020 14,136,787 13,799,173 97.6% 26,836 13,826,009 97.8% 2019 12,887,417 12,870,997 99.9% 18,713 12,887,417 100.0% 2018 12,669,581 12,628,024 99.7% 39,607 12,666,665 100.0% 2017 12,478,630 12,401,338 99.4% 78,577 12,478,630 100.0% 2016 12,437,857 12,204,948 98.1% 232,909 12,437,857 100.0% 2015 10,737,703 10,612,272 98.8% 125,431 10,737,703 100.0% 2014 10,696,886 10,493,954 98.1% 202,932 10,696,886 100.0% 2013 10,594,623 10,398,888 98.2% 195,735 10,594,623 100.0% Source: City of Dover Assessor & Customer Service Reports. Property Taxes Levied Last Ten Fiscal Years $17 $15 Millions $13 $11 $9 $7 $5 $3 $1 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 NOTES 1. Section 48 of the City of Dover charter provides that the maximum budget to be raised through property taxes shall not exceed 2% of the total taxable assessment. 2. Total Tax Levy represents the annual tax billings, quarterly billings, penalties, and adjustments from tax appeals. 3. The table excludes payments in lieu of taxes and farm land roll back taxes. 268 184

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 10 City of Dover, Delaware Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-type Activities General Water Wastewater Electric Total Percentage Fiscal Obligation Revenue Revenue Revenue Primary of Personal Per Year Bonds Bonds Bonds Bonds Government Income Capita Population 2022 $ 6,111,209 $ 7,197,300 $ 5,998,554 $ 14,352,305 $ 33,659,368 3.2% 852 39,491 2021 6,598,524 7,772,675 6,228,637 15,254,787 35,854,623 3.7% 933 38,412 2020 5,371,284 8,334,270 6,001,858 16,115,093 35,822,505 2.8% 934 38,349 2019 5,700,000 7,305,318 5,892,377 16,854,752 35,752,447 3.8% 916 37,790 2018 5,877,013 5,690,715 5,621,684 17,890,000 35,079,412 4.1% 921 38,422 2017 6,209,368 6,078,504 6,032,584 18,620,000 36,940,456 4.3% 978 37,686 2016 6,782,865 6,455,126 6,433,665 19,315,000 38,986,656 4.6% 1,041 37,941 2015 7,336,689 6,824,206 6,826,581 21,680,000 42,667,476 5.4% 1,137 37,560 2014 4,049,758 6,571,627 7,840,720 23,940,000 42,402,105 5.4% 1,130 37,540 2013 4,478,997 4,335,713 6,591,004 26,110,000 41,515,714 5.1% 1,138 36,492 Source: City of Dover Financial Records Population Source: City Count Beginning in FY19, Electric Revenue Bonds includes a premium of $1,154,752. Fiscal Year 2020 Electric Revenue Bonds includes a premium of $1,065,093. Fiscal Year 2021 Electric Revenue Bonds includes a premium of $989,787. Fiscal Year 2022 Electric Revenue Bonds includes a premium of $907,305. 269 185

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 11 Ratio of Net General Obligation Bonded Debt To Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years Ratio of Net Net Net Bonded Bonded Taxable Gross Net Debt To Debt Fiscal Assessed Bonded Bonded Assessed Per Year Population Value Debt Debt Value Capita 2022 39,491 $3,584,529,365 $ 6,111,209 $ 6,111,209 0.17% 154.75 2021 38,412 3,580,083,100 6,598,524 6,598,524 0.18% 171.78 2020 38,349 3,273,992,600 5,371,284 5,371,284 0.16% 140.06 2019 37,790 3,258,089,500 5,700,000 5,700,000 0.17% 150.83 2018 38,422 3,214,744,100 5,877,013 5,877,013 0.18% 154.24 2017 37,686 3,156,311,000 5,877,013 5,877,013 0.19% 154.24 2016 37,941 3,107,912,100 6,782,865 6,782,865 0.22% 179.51 2015 37,560 3,207,153,560 7,336,689 7,336,689 0.23% 195.03 2014 37,540 3,159,893,860 4,049,758 4,049,758 0.13% 107.88 2013 36,492 3,181,496,360 4,478,997 4,478,997 0.14% 121.97 Source: City of Dover Financial Records, Tax Assessor’s Office and Delaware Population Consortium Annual Population Projections (City Count). NOTES 1. This table includes all long-term general obligation bonded debt only. The Enterprise Funds have no general obligation debt. 2. Assessed value reflects the net billable tax base and does not include the exempt value, exemption for Senior Citizens and exemption for disability. 270 186

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 12 City of Dover, Delaware Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Last Ten Fiscal Years Ratio of Debt Service Total Total to Total Fiscal Debt General General Year Principal Interest Service Expenditures(1) Expenditures 2022 $ 487,315 $ 144,822 $ 632,137 $ 49,604,484 1.27% 2021 335,760 130,128 465,888 46,433,359 1.00% 2020 328,716 134,852 463,568 49,048,464 0.95% 2019 322,745 132,829 455,574 46,907,709 0.97% 2018 332,355 128,455 460,810 44,049,712 1.05% 2017 573,497 118,771 692,268 44,378,544 1.56% 2016 553,824 118,565 672,389 46,477,667 1.45% 2015 848,069 114,243 962,312 45,484,211 2.12% 2014 429,239 122,812 552,051 39,646,120 1.39% 2013 296,003 73,071 369,074 40,517,512 0.91% Source: City of Dover Financial Records. NOTES 1. The General Expenditures include all operating items, capital items and debt service. 271 187

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 13 City of Dover, Delaware Computation of Direct and Overlapping Debt with the Capital School District June 30, 2022 Percentage Amount Net Debt Applicable to Applicable to Jurisdiction Outstanding City of Dover City of Dover City of Dover $ 6,111,209 100% $ 6,111,209 Kent County (1) 51,833,763 0% N/A (2) Capital School District 73,610,524 0% N/A TOTAL $ 131,555,496 $ 6,111,209 Sources: City of Dover Financial Records, Kent County Levy Court - Accounting Department and Capital School District - Administration Department. NOTES 1. Kent County: Total debt for Kent County is $51,833,763 as of June 30, 2022. Although Kent County's bonds are general obligation bonds, $48,929,411 is payable from the Kent County Sewer Fund(s) or other committed sources. 2. Capital School District: As of June 30, 2022, the net outstanding debt was $73,610,524. Percentage and amount is not applicable to the City of Dover. 272 188

2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Item 5. Table 14 Computation of Legal Debt Margin Last Ten Fiscal Years (amounts expressed in thousands) Fiscal Year 2022 2021 2020 2019 2019 2018 2017 2016 2015 2014 2013 Debt Limit $ 179,226 $ 179,004 $ 163,700 $ 162,904 $ 160,737 $ 157,816 $ 155,396 $ 158,485 $ 157,995 $ 159,075 $ 158,465 Net (Taxable) Assessed Value on Books 3,584,529 3,580,083 3,273,993 3,258,090 3,214,744 3,156,311 3,107,912 3,207,154 3,159,894 3,181,496 3,169,308 Total net debt applicable to limit 6,111 6,599 5,371 5,700 5,877 6,209 6,783 7,337 4,050 4,479 1,550 Legal Debt Margin $ 173,115 $ 172,406 $ 158,328 $ 157,204 $ 154,860 $ 148,613 $ 151,149 $ 153,945 $ 154,596 $ 156,915 $ 155,012 Total Net Debt applicable to limit as a percentage of debt limit 3.41% 3.69% 3.28% 3.50% 3.59% 4.36% 4.63% 2.56% 2.82% 0.98% 1.16% Legal Debt Margin Calculation for the current fiscal year Net (Taxable) Assessed Value on Books $ 3,584,529 Debt Limit - 5 Percent of Total Assessed Value $ 179,226 DEBT (For which the City's full faith and credit has been pledged) Gross Bonded Debt 6,111 LEGAL DEBT MARGIN $ 173,115 Source: City of Dover Financial Reports, City of Dover Charter, Section 50(b), and Tax Assessor's Office 273 189

Item 5. 2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Table 15 City of Dover, Delaware Revenue Bond Coverage - Electric Revenue Bonds Last Ten Fiscal Years Available Fiscal Gross Operating For Debt Debt Service Requirements of Each Fiscal Year Year Revenue Expenses Service Principal Interest Total Coverage 2022 $ 81,068,373 $ 61,999,191 $ 19,069,182 $ 820,000 $ 532,950 $ 1,352,950 14.09 2021 80,114,761 50,412,239 29,702,522 785,000 573,950 1,358,950 21.86 2020 81,872,067 52,849,253 29,022,814 650,000 613,200 1,263,200 22.98 2019 84,195,248 56,720,895 27,474,353 765,000 669,785 1,434,785 19.15 2018 84,235,174 60,595,349 23,639,825 730,000 847,454 1,577,454 14.99 2017 83,943,882 54,748,915 29,194,967 695,000 883,954 1,578,954 18.49 2016 80,846,658 54,418,343 26,428,315 2,365,000 918,704 3,283,704 8.05 2015 79,769,994 66,521,873 13,248,121 2,260,000 1,036,954 3,296,954 4.02 2014 79,476,865 68,594,189 10,882,676 2,170,000 1,131,854 3,301,854 3.30 2013 90,876,162 68,546,508 22,329,654 2,110,000 1,205,554 3,315,554 6.73 Source: City of Dover Financial Records. NOTES 1. Coverage required by the bond resolution is 1.25. 4. Figures presented in this table compare the net revenue available for debt service to the debt service requirements 2. Calculation of gross revenue for fiscal year 2021 is as follows: of the same fiscal year. Gross Revenue: 5. In August 2018, the City issued Electric Revenue Operating Revenues $ 80,782,417 Refunding Bonds in the amount of $15,700,000 to refund Interest Earned-Operating Funds 285,956 the 2008 Series. This refunding reduced the principal Total Gross Revenue $ 81,068,373 payable by $2,190,000. 3. Direct operating expenses do not include depreciation expense. 190 274

Item 5. 2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Table 16 City of Dover, Delaware Revenue Bond Coverage - Water Bonds Last Ten Fiscal Years Maximum Requirements Net Revenue Maximum Direct Available Debt Fiscal Gross Operating For Debt Service Actual Year Revenue Expenses Service Requirement Coverage 2022 $ 7,401,649 $ 3,723,004 $ 3,678,645 $ 777,563 4.73 2021 6,792,206 3,162,972 3,629,234 777,563 4.67 2020 6,319,837 3,688,935 2,630,902 543,630 4.84 2019 6,529,019 3,203,880 3,325,139 524,242 6.34 2018 6,447,543 2,909,073 3,538,470 524,242 6.75 2017 6,609,242 3,125,243 3,483,999 524,242 6.65 2016 6,172,107 3,515,886 2,656,221 524,242 5.07 2015 5,601,248 2,977,707 2,623,541 524,242 5.00 2014 5,170,210 3,146,564 2,023,646 524,242 3.86 2013 5,191,780 3,087,102 2,104,678 403,438 5.22 Source: City of Dover Financial Records. NOTES 1. Coverage required by bond resolution is 1.20. 2. Direct operating expenses do not include depreciation expense for coverage purposes as per the bond indenture. 3. In Fiscal year 2013, various capital projects were completed. These capital projects were financed by a state revolving fund loan issued in 2010 in the amount of $2.4 million resulting in an increase in debt service. 4. In Fiscal year 2014, the City issued Water and Sewer Revenue Bonds in the amount of $6,125,000. These bonds were issued to refund the Series 2003 Water and Wastewater Revenue bonds and provided $4,005,960 for two capital projects. 5. Gross revenue is derived by taking gross revenue plus operating interest less the transfer to the water impact fee reserve. 6. In Fiscal year 2020, various capital projects were completed for the Water Treatment Plant. These capital projects were financed by a state revolving fund loan issued in FY 2018 in the amount of $4.0 million, resulting in an increase in debt service. 191 275

Item 5. 2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Table 17 City of Dover, Delaware Revenue Bond Coverage - Wastewater Bonds Last Ten Fiscal Years Maximum Requirements Net Revenue Maximum Direct Available Debt Fiscal Gross Operating For Debt Service Actual Year Revenue Expenses Service Requirement Coverage 2022 $ 9,619,297 $ 5,716,000 $ 3,903,297 $ 661,936 5.90 2021 9,545,633 6,575,007 2,970,626 630,158 4.71 2020 8,731,984 5,769,453 2,962,531 739,193 4.01 2019 8,749,309 6,916,935 1,832,374 608,563 3.01 2018 8,528,281 6,137,754 2,390,527 608,563 3.93 2017 8,745,021 5,781,479 2,963,542 608,563 4.87 2016 8,833,588 6,105,790 2,727,798 608,563 4.48 2015 8,784,378 6,272,640 2,511,738 608,563 4.13 2014 8,137,044 6,179,842 1,957,202 608,563 3.22 2013 8,091,003 5,754,656 2,336,347 615,877 3.79 Source: City of Dover Financial Records. NOTES 1. Coverage required by bond resolution is 1.20. 2. Direct operating expenses do not include depreciation expense for coverage purposes as per the bond indenture. 3. In Fiscal year 2013, various capital projects were completed. These capital projects were financed by two state revolving fund loans issued in 2009 & 2011 in the amount of $5.6 million and $0.8 million, resulting in an increase in debt service. 4. In Fiscal year 2014, the City issued Water and Sewer Revenue Bonds in the amount of $6,125,000. These bonds were issued to refund the Series 2003 Water and Wastewater Revenue bonds and provided $4,005,960 for two capital projects. 5. Gross revenue is derived by taking gross revenue plus operating interest less the transfer to the wastewater impact fee reserve. 6. In Fiscal year 2020, three pumpstations were replaced. These capital projects were financed by a state revolving fund loan issued in 2018 in the amount of $881,356, resulting in an increase in debt service. 7. In Fiscal year 2022, the Puncheon Run pump station grit removal system was replaced. This capital project was financed by a state revolving fund loan issued in 2020 in the amount of $732,200, resulting in an increase in debt service. 192 276

Item 5. 2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Table 18 City of Dover, Delaware Top 10 Water and Wastewater Utility Customers Fiscal Year Ended June 30, 2022 Water % of % of Consumption Total Revenue Total Customer (Tgal) Consumption Billed Revenue Garrison Energy Center 265,289 15.76% $ 1,060,373 17.26% Procter and Gamble 57,350 3.41% 227,816 3.71% Delaware State University 45,211 2.69% 178,338 2.90% Dover Downs Inc 37,858 2.25% 149,848 2.44% Tidewater Utilities 31,190 1.85% 118,768 1.93% Kraft Foods Global 24,475 1.45% 96,316 1.57% Bayhealth Medical Center 23,612 1.40% 98,147 1.60% Kent General Hospital 23,124 1.37% 96,110 1.56% Dover Housing Authority 22,553 1.34% 85,730 1.40% Sovereign Property Management 19,432 1.15% 65,262 1.06% Totals for Top 10 Customers 550,094 32.67% 2,176,706 35.42% All Other 1,133,686 67.33% 3,968,048 64.58% Total for System 1,683,780 100.00% $ 6,144,754 100.00% Wastewater % of % of Consumption Total Revenue Total Customer (Tgal) Consumption Billed Revenue Procter and Gamble 42,796 3.31% $ 313,982 3.35% Dover Downs 37,858 2.93% 277,619 2.96% Delaware State University 33,833 2.62% 249,241 2.66% Bayhealth Medical Center 23,612 1.83% 181,514 1.93% Kent General Hospital 23,124 1.79% 179,568 1.91% Dover Housing Authority 22,516 1.74% 170,269 1.81% Kraft Foods Global 21,361 1.65% 189,284 2.02% Sovereign Property Management 19,432 1.50% 144,357 1.54% Garrison Energy Center 19,252 1.49% 141,237 1.50% Dover East Estates 10,950 0.85% 80,324 0.86% Totals for Top 10 Customers 254,734 19.71% 1,927,393 20.54% All Other 1,037,891 80.29% 7,458,171 79.46% Total for System 1,292,625 100.00% $ 9,385,564 100.00% NOTES: 1. Both the Water and Wastewater revenue billed amounts for each top customer, do not include the monthly flat rate of $5.00. 2. The total Revenue amounts for both Water and Wastewater include the monthly flat rates. 193 277

Item 5. 2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Table 19 City of Dover, Delaware Top 10 Electric Utility Customers Fiscal Year Ended June 30, 2022 % of Total Revenue % of Total Customer Kwh Kwh Billed Revenue Dover Air Force Base 60,907,642 8.4% $ 3,672,952 4.7% Edgewell Personal Care Products 41,004,487 5.6% 2,591,639 3.3% Delaware State University 31,318,671 4.3% 1,982,071 2.5% Bay Health/Kent General 28,719,315 3.9% 1,834,680 2.3% Kraft 27,583,975 3.8% 1,652,280 2.1% Dover Downs 21,077,420 2.9% 1,332,222 1.7% State of Delaware 13,922,295 1.9% 871,702 1.1% Procter & Gamble 14,445,971 2.0% 867,345 1.1% Capital School District 8,924,563 1.2% 564,633 0.7% Eden Hill Medical Center 4,501,200 0.6% 284,476 0.4% Totals for Top 10 Customers 252,405,539 34.7% 15,654,000 19.9% All Other 474,819,429 65.3% 62,962,488 80.1% Total for System 727,224,968 100.0% $ 78,616,488 100.0% Note: The revenue billed includes direct base sales and utility tax. 194 278

Item 5. 2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Table 20 City of Dover, Delaware Demographic and Economic Statistics Last Ten Calendar Years Per Capita Personal Personal Median School Unemployment Year Population Income Income Age Enrollment Rate 2022 39,491 $ 1,043,312,729 $ 26,419 33.8 6,384 4.5% 2021 38,412 965,293,560 25,130 30.7 6,332 10.9% 2020 38,349 1,297,385,019 33,831 38.2 6,250 6.7% 2019 37,790 921,244,620 24,378 29.9 6,519 5.7% 2018 38,422 865,182,114 22,707 29.5 6,494 5.8% 2017 37,686 827,207,700 21,950 30.0 6,523 6.2% 2016 37,941 842,783,433 22,213 30.2 6,486 5.7% 2015 37,560 730,354,200 19,445 31.3 6,665 7.4% 2014 37,540 788,039,680 20,992 29.8 6,527 6.4% 2013 36,492 821,361,936 22,508 31.1 6,344 9.6% Population Source: City Count Personal Income Source: Estimation based on Population times Per Capita Personal Income Per Capita Personal Income Source: U.S. Census Bureau, 2015-2019 Quick Facts Median Age Source: Data USA; Dover, DE, Deloitte Touche Tohmatsu Limited Capital School Enrollment Source: Includes kindergarten through 12th grade Unemployment Rate Source: Delaware Department of Labor 195 279

Item 5. 2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Table 21 City of Dover, Delaware Major Employers by Industry Current Year and Nine Years Ago 2021 4th Quarter 2012 4th Quarter Percentage of Percentage of Number of Total County Number of Total County Industry Description Employees Rank Employment Employees Rank Employment Government 19,161 1 27.9% 18,944 1 30.4% Health care & social assistance 9,851 2 14.4% 8,763 3 14.1% Retail trade 9,560 3 13.9% 9,474 2 15.2% Accommodation & food services 5,954 4 8.7% 5,063 4 8.1% Manufacturing 5,105 5 7.4% 3,331 5 5.3% Admin and waste services 3,614 6 5.3% 2,107 8 3.4% Transportation & warehousing 2,841 7 4.1% 2,136 7 3.4% Construction 2,822 8 4.1% 2,105 9 3.4% Professional & technical services 2,174 9 3.2% 1,602 10 2.6% Finance & insurance 1,210 10 1.8% - - - Arts, entertainment, & recreation - - - 2,667 6 4.3% 62,292 90.8% 56,192 90.2% Total - All Industries 68,620 62,268 Source: Delaware Department of Labor/Office of Occupational and Labor Market Information/Payroll Data/Quarterly Census of Employment and Wages (Geography information is available by County only, not by City) Note: The names of the top employers & number of employees is confidential and may not be disclosed to the public pursuant to 20 CFR (Code of Federal Regulations) Part 603. As a result, the employment information provided is by industry. 196 280

Item 5. 2022 Annual Comprehensive Financial Report for the City of Dover, Delaware Statistical Section Table 22 City of Dover, Delaware Full-time Equivalent City Government Employees by Fund/Department - Budgeted Last Ten Fiscal Years 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Assessor 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 City Clerk 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 City Manager 6.0 6.0 5.0 5.0 5.0 4.0 4.0 4.0 4.0 3.0 Customer Services 14.0 16.0 16.0 16.0 16.0 13.0 14.0 14.0 15.0 14.0 Facilities Management 6.0 4.0 5.0 5.0 5.0 5.0 7.0 7.0 7.0 9.0 Finance 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 Fire 5.0 5.0 5.0 5.0 5.0 5.0 5.0 6.0 8.0 6.0 Fleet Maintenance 5.0 6.0 7.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Human Resources 4.0 4.0 4.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Information Technology 5.0 4.0 4.0 4.0 4.0 4.0 4.0 5.0 5.0 5.0 Library 15.0 14.0 14.0 13.0 13.0 13.0 13.0 14.0 13.0 13.0 Mayor 2.0 2.0 2.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Parks and Recreation 9.0 6.0 9.0 9.0 5.0 5.0 5.0 5.0 5.0 5.0 Police Civilian 34.0 35.0 34.0 33.0 33.0 33.0 33.0 31.0 31.0 29.0 Police Law Enforcement 106.0 101.0 101.0 101.0 101.0 101.0 101.0 93.0 93.0 93.0 Procurement & Inventory 5.0 5.0 4.0 5.0 3.0 3.0 3.0 3.0 4.0 4.0 Public Works, Administration 5.0 5.0 7.0 6.0 6.0 6.0 6.0 5.0 5.0 6.0 Planning, Inspections 6.0 6.0 7.0 6.0 6.0 6.0 6.0 6.0 6.0 7.0 Planning, Life Safety 4.0 4.0 4.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Economic Development - - - - - - 3.0 3.0 3.0 3.0 Public Works, Engineering 2.0 2.0 2.0 3.0 3.0 3.0 3.0 3.0 - - Planning 6.0 6.0 6.0 6.0 6.0 6.0 6.0 5.0 4.5 4.5 Planning, Code Enforcement 6.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 4.0 Community Development - - - - - - - - 0.5 0.5 Public Works, Grounds Maintenance 14.0 17.0 14.0 13.0 13.0 13.0 13.0 13.0 14.0 14.0 Public Works, Sanitation 11.0 11.0 10.0 10.0 10.0 10.0 10.0 11.0 11.0 11.0 Public Works, Streets 7.0 7.0 7.0 8.0 8.0 8.0 8.0 8.0 8.0 10.0 Public Works, Stormwater 7.